Brazillian airframer Embraer reported a $98.6 million drop in its second quarter net cash position to $406.3 million due to an increase in the company's inventories. Embraer also used its cash to acquire an interest stake in Orbisat and Atech during the quarter.
The airframer says in an earnings release it remains focused on its "cash allocation strategy" to mitigate exchange rate risks by balancing funds in reais and dollar denominated assets. Of total cash at quarter end, 51% was denominated in reais.
An increase in short and long-term loans of $65 million and $141 million, respectively, fuelled an increase in second quarter debt to $1.7 billion from $1.5 billion the year prior.
During the first half of 2011 Embraer delivered 45 commercial jets and sold 62 new aircraft. The airframer said it expects to add agreements for 42 additional jets to its backlog in the coming months.
Embraer recorded a second quarter pre-tax profit of $121 million compared with $106 million in the year-earlier period. Net income for the second quarter increased to $96 million from $57 million year-over-year.
Its net margin totalled 7.1% compared with 4.2% the year prior.