The first year of Bombardier’s five-year recovery plan ended as promised, with the Canadian manufacturer recording a $981 million net loss overall, including a $903 million loss before interest and taxes in the Commercial Aircraft division.
Though the company lost nearly $1 billion in 2016, that performance was sharply improved from a nearly disastrous 2015, which yielded a $5.34 billion net loss.
Bombardier chief executive Alain Bellemare says the company is on track to return to reach break-even on cash flow in 2018 and generate profits from the CSeries programme by 2020, as he outlined in a recovery plan released in late 2015.
“Our turn-around plan is in full motion,” Bellemare says.
Bombardier deployed $1.06 billion in cash flow in 2016, down from a $1.84 billion draw in 2015. The company ended the year with $4.48 billion in short-term capital resources, thanks to a controversial $1 billion investment by the province of Quebec that has drawn a formal complaint by Brazil in the World Trade Organisation.
Overall revenues declined by 10% to $16.3 billion, while operating earnings before special items dropped nearly 20% to $798 million.
In the fourth quarter, Bombardier’s overall revenues declined by 12.7% year-over-year to $4.38 billion. The quarterly net loss amounted to $259 million, a $418 million improvement from a steeper loss posted a year before. Operating earnings before special items improved during the quarter $203 million, compared to a $139 million profit recorded during the same period in 2015.
The Commercial Aircraft division reported a 9% jump in full-year earnings, rising to $2.62 billion, as the unit delivered 10 more aircraft.