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On the Fly

CHC is riding high on a thriving global oil and gas industry and
looking ahead to an extensive fleet replacement program.

The
company says it has a “huge list’’ of customers looking for bids on
potential new offshore contracts, but just doesn’t have enough aircraft
to support them all. “The activity is continuing to increase with
several requests for bids to support existing oil and gas projects and
we’re also looking at extensive fleet replacement programs in for
example Nigeria, Brazil and India,’’ said CEO Sylvain Allard.

CHC
added 15 new medium helicopters and two new heavy helicopters in the
last year. “All these aircraft are fully deployed and the fleet is
still very tight. In fact, we anticipate that the impressive growth
experienced in the last 12 months in our global operations will
continue for fiscal 2006,” Allard said.

And CHC has commitments
for several more helicopters and options on others this year. “We are
working with all three manufacturers right now, Sikorsky, Bell and
Eurocopter to figure out line positions, how quickly we can get
aircraft and how many we can get and what the prices are going to be,’’
said chief financial officer Jo Mark Zurel. “And depending how those
negotiations work out we may buy more or less from the different
manufacturers.’’

CHC reported revenue of $226.4 million for the
fourrth quarter of fiscal 2005, which ended April 30. This was an
increase of $17 million or 8.1% from the same period last year. The
increase was primarily due to a 61.4% increase in the company’s repair
and overhaul business and a 17.3% increase in the international flying
segment.

Operating income for the quarter was $29.5 million, an
increase of $8.3 million or 39.2% from the same period last year. Net
earnings were $18.8 million or 41 cents per share, compared with $25.4
million or 56 cents per share a year earlier.

For the full year,
CHC had revenue of $903.3 million, operating income of $131.3 million
and net earnings oif $62.6 million or $1.37 per share. These figures
compared with $720 million, $94.3 miliion and $63.7 million or $1.41
per share respectively in fiscal 2004.

The company expects
profit margins to be improved by its decision to eliminate 180 jobs,
along with improvements in fleet management, working capital
management, procurement and logistics. Zurel said CHC has incurred
substantial restructuring costs and there will be additional costs in
fiscal 2006. “The vast majority of the savings will be coming in the
coming fiscal year. We in fact incurred some duplicate costs in fiscal
2005 because we had restructuring costs in letting some people go and
all the consulting and legal and tax work and relocation costs.” CHC
needs more helicopters to support a growing number of offshore bid
requests.