Features
Procedures
Safety & Training
Helicopter training revenues could take hit: CAE
February 10, 2015 By The Canadian Press
Feb. 10, 2015, Montreal - A protracted downturn in oil prices could hurt CAE Inc.'s helicopter training business as the companies that ferry workers to and from offshore oil rigs slow spending, the flight simulator and training company says.
Although it represents less than five per cent of the company's civil
simulation and training revenue, CAE said lower crude prices could mean
a slowdown for the helicopter operators that service the offshore oil
fields around the world.
CAE chief executive Marc Parent said Friday offshore
operators have held up "pretty well" so far, but that could change if
prices remain lower over the long-term.
"I wouldn't say that it's huge
right now in terms of offshore operators but definitely it could," he
said during a conference call to discuss its third-quarter results.
Major oil companies have slashed capital
spending plans in recent months in response to the sharp drop in the
price of oil. The price of crude, which has moved higher in recent days,
remains less than half of its highs of last year.
Overall, Parent said the company will benefit
from lower crude prices because they have helped to depreciate the
Canadian dollar.
CAE said it is optimistic for a
strong second-half of its financial year after its net income
attributable to shareholders increased 15 per cent to $53 million in the
third quarter. It said civil aviation market fundamentals remain strong
despite softness in Europe and the defence market continues to be
resilient.
The company earned 20 cents per share for the
three months ended Dec. 31, one cent above analyst expectations. That
compared with a profit of $46.1 million or 18 cents per share a year
earlier.
Revenue increased 11 per cent to $559.1 million and the total order backlog reached $5 billion.
The civil aviation segment's
operating income increased 19 per cent to $53.8 million on $322 million
of revenues from the sale of 18 full-flight simulators and new training
contracts.
Health-care simulation segment earnings more than doubled to $500,000 on $21.3 million of revenues.
Defence segment profits slipped to $28.6 million
from $31 million despite a nearly seven per cent increase in revenues
to $215.7 million.
The company expects defence grow
longer term as its military backlog is $2.4 billion and it has bid on
nearly $2 billion worth of contracts.
CAE said the $19.8-million acquisition of
Bombardier's military aviation training business will allow it to
provide live military training in Canada and to NATO allies and position
it to bid on foreign contracts.
It will also put the company in the mix as
Canada determines its future pilot training system and decides which new
fighter aircraft it will buy.
