Embraer's E190-E2 demonstrator departs Farnborough. Photo by Karam Sodhi | AeroNewsX
Brazil-based commercial and military aircraft manufacturing corporation Embraer has today released its second quarter (Q2) financial results for the period ended June 30, 2020, and has reported ongoing losses due to decreased aircraft sales as a result of the COVID-19 pandemic.
Airlines and aircraft manufacturers across the globe have all been equally disadvantaged by the COVID-19 pandemic and Embraer is no exception to this. In today's announcement, the Sao Jose dos Campos-based aircraft manufacturer posted an adjusted net loss for Q2 2020 of US$198.8 million, compared to a healthy profit from the same period last year. The manufacturer also posted a total revenue for the quarter of US$1.171 billion, This represents a huge plummet in revenue by over 82% compared to the same quarter in 2019.
In today's financial report, Embraer Commercial Airplanes also released its updated deliveries and backlog report for the second quarter of 2020, with the company reporting it had delivered a total of just four commercial jets over the three month period, consisting of two Embraer E175s and two of the upgraded Embraer E190-E2s. In the business aviation sector, deliveries were more plentiful with a total of thirteen business jets delivered over Q2, consisting of 9 light business jets and 4 large business jets. According to Embraer, "the company had delivered fewer commercial and executive jets than previous years during the second quarter of 2020, largely due to the COVID-19 pandemic which is affecting the world." Embraer's commercial jet backlog currently stands at 314 aircraft, with a total value of US$15.4 billion.
However, there were some green shoots in an otherwise barren period for Embraer with Swiss-based regional airline Helvetic Airways converting four of an existing order for E190-E2s to the larger E195-E2 variant, which is currently Embraer's flagship aircraft. Democratic Republic of Congo's flag carrier, Congo Airways, also converted its order for two Embraer E175 aircraft placed in December 2019 to the more modern and fuel efficient Embraer E190-E2. Unfortunately, however, there were no specifically new orders for commercial or executive jets during this difficult financial period for Embraer, as a result of the global COVID-19 pandemic.
In addition to today's announcement, Embraer has also suspended profit guidance for Q3 2020 due to the ongoing uncertainty regarding the aviation industry's recovery from the global pandemic. Despite this, the manufacturer has estimated its net cash reserves in late June to be US$2 billion, including US$700 million in financing for working capital and export credits.
The aftermath of the failed Boeing takeover of Embraer Commercial Airplanes was also estimated to have cost Embraer US$22.2 million during Q2 2020, as the commercial airplanes division required reintegration after being separated from the other Embraer divisions as part of the larger plans for the Boeing takeover and the establishment of a new Boeing Brazil brand which was poised to market the E-Jet and E-Jet E2 families of aircraft. This plan was however scrapped on April 27th 2020 due to an ongoing restructuring process at Boeing Commercial Airplanes.
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