Embraer reports 36% drop in 2009 profits

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Brazilian airframer Embraer has posted a 36% fall in its full-year net profit in 2009, after sales declined in the face of the global financial downturn.

It reported a net profit of $248.5 million, down $140.2 million from the $388.7 million profit it posted in 2008.

Net sales revenue fell 14% to $5.5 billion from $6.3 billion a year ago, says Embraer.

In its fourth fiscal quarter ended 31 December 2009, net profit grew 31% to $146.4 million.

Net sales revenue for the quarter was down 11% to $1.6 billion, but Embraer says this was the highest quarter revenue recorded in 2009, in a sign that the economy is recovering.

It delivered 91 aircraft in the fourth quarter in a new record, taking the total number of deliveries in 2009 to 244.

In terms of segment sales, Embraer's commercial aviation segment was the worst hit by the global financial downturn. It posted a 21% decline in net sales to $3.4 billion from $4.2 billion a year ago, after delivering 40 fewer aircraft.

"The crisis has also impacted new orders that were frozen during most of the year and totalled 23 aircraft at the year-end," says Embraer.

"In our view, such scenario might be changing and some positive signs, such as the improvements in global economic activities and some positive performance indicators coming from the airline industry, may indicate a mild recovery."

Embraer delivered 122 commercial aircraft in 2009, and has a firm backlog of 265.

In its executive aviation segment, net sales grew 3% to $896.3 million with the delivery of 115 aircraft.

"The lower number of Legacy 600 deliveries was offset by the deliveries of three Lineage 1000, 93 Phenom 100 and the first delivery of a Phenom 300," says Embraer.

Defense aircraft sales revenue was down 1% to $498.8 million, with most sales concentrated in the fourth quarter.

The airframer delivered seven transportation aircraft in 2009, and 20 Super Tuscano aircraft for training and light attack.

Looking ahead, Embraer says its firm order backlog totals $16.6 billion, equivalent to three years' revenue.

It expects to achieve $5 billion in sales revenue in 2010, half of which will be contributed by its commercial aviation segment.

"The traffic of passengers is returning, after several months, to levels prior to [the] crisis... Embraer expects an increase of orders in 2010, and the total number of orders shall surpass 2009 numbers," says the airframer.

Embraer hopes to deliver 227 aircraft this year, of which 137 will be from the executive aviation segment and the remaining 90 from the commercial segment.

It expects to report EBITDA (earnings before interest, tax, depreciation and amortisation) of $375 million in 2010.