OTTAWA, ON, April 10, 2025 /CNW/ - NAV CANADA today released its financial results for the three and six months ended February 28, 2025.
In the second quarter of fiscal 2025, the Company saw air traffic levels, as measured in weighted charging units(1), increase by 1.3% on a year over year basis. Excluding the effect of an extra day for the leap year in fiscal 2024, air traffic levels were 2.5% higher. The Company's revenue for the second quarter of fiscal 2025 was $396 million, compared to $393 million over the same period in fiscal 2024.
"In response to the aviation industry's dynamic landscape and ongoing modernization initiatives, we remain committed to proactive cost management while moving forward with strategic investments that will improve our long-term financial resilience," says Mark Cooper, NAV CANADA, President and CEO. "In the current global economic context, it is more important than ever for us to optimize our operations to deliver exceptional service to our customers and position ourselves to most effectively meet the evolving needs of the industry."
The Company had negative free cash flow(2) of $69 million in the second quarter of fiscal 2025 as compared to negative free cash flow of $28 million in the same period in fiscal 2024. The decrease in free cash flow is driven by higher capital investments and higher operating cash outflows as compared to the second quarter of fiscal 2024. The Company ended the quarter with a cash balance of $664 million.
Operating expenses for the second quarter of fiscal 2025 were $423 million as compared to $435 million over the same period in fiscal 2024, primarily due to the asset impairment in fiscal 2024 partially offset by higher compensation costs driven by an increase in both wage and staffing levels.
Other expenses for the second quarter of fiscal 2025 were $8 million as compared to $24 million over the same period in fiscal 2024, primarily due to the impact of changes in the Canadian and U.S. dollar exchange rate on the investment in Aireon as well as the impact of the asset impairment in fiscal 2024.
The Company had a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $35 million in the second quarter of fiscal 2025 as compared to a net loss of $66 million for the second quarter of fiscal 2024.
The Company is subject to legislation that regulates its approach to setting charges. The timing of the recovery of certain revenue and expenses through customer service charges is managed through movements in regulatory deferral accounts. The net movement in regulatory deferral accounts for the second quarter of fiscal 2025 was an expense of $35 million as compared to an expense of $30 million over the same period in fiscal 2024.
As at February 28, 2025, the rate stabilization account had a debit balance of $186 million, which reflects an increase of $34 million during the quarter. This shortfall is to be recovered from customers through future customer service charges.
Associated Links
The Company's Financial Statements and Management's Discussion and Analysis for the three and six months ended February 28, 2025 can be found at:
Financial Statements
Management's Discussion and Analysis
About NAV CANADA
NAV CANADA is a private, not-for-profit company, established in 1996, providing air traffic control, airport advisory services, weather briefings and aeronautical information services for more than 18 million square kilometres of Canadian domestic and international airspace.
The Company is internationally recognized for its safety record and technology innovation.
(1) Weighted charging units represent a traffic measure that reflects the number of billable flights, aircraft size and distance flown in Canadian airspace and is the basis for movement-based service charges, which comprise the vast majority of the Company's revenue.
(2) Free cash flow is a non-GAAP financial measure used by the Company to enhance the overall understanding of its financial and operating performance. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines free cash flow as cash generated from operations, less capital expenditures (net of government grants received), investments in regulatory assets, investments in Aireon LLC and equity related investments and principal payment of lease liabilities. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company's financial resources and provides users with a more stable indication of the Company's ability to meet its debt obligations and continue to invest in the air navigation system.
This press release contains certain forward-looking statements that are subject to important risks and uncertainties. Actual results may differ materially from the results indicated in these statements for a number of reasons. NAV CANADA disclaims any intention to update any forward-looking statements.
SOURCE NAV CANADA
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