2010 YEAR-END RESULTS
The Company generated revenue of $170.7 million, representing an increase of 10.7% over 2009 revenue of $154.2 million. Visual Flight Rules (VFR) revenue increased $29.2 million primarily due to revenues from aircraft contracted in Afghanistan, including the additional medium and heavy aircraft contracted as part of supplemental work awarded in March and October 2010. Instrument Flight Rules (IFR) revenue decreased by $16.7 million primarily resulting from the loss of the United States Transportation Command North Warning System operation and maintenance contract, as well as from reduced customer activity in the oil and gas industry. Ancillary revenue, including the CFTS contract, grew $4.0 million primarily due to the consolidation of maintenance revenues from Heli-Welders and Nampa Valley Helicopters. Revenue-flying hours decreased 1.9% to 56,675 hours.
EBITDA reached $38.0 million, up 23.4% from $30.8 million in 2009. This increase mainly reflects a more favourable revenue mix resulting from increased activity in Afghanistan where revenues reflect the significantly higher level of effort to accomplish the work. As a result, earnings before non-controlling interest were $28.1 million, or $2.14 per share/unit in 2010, versus $26.8 million, or $2.05 per unit, in 2009.
Reflecting higher net earnings, cash flows related to operating activities before net changes in non-cash working capital balances increased 20.9% to $33.8 million in 2010, from $28.0 million in 2009. Distributable cash amounted to $30.9 million, or $2.36 per share/unit in 2010, compared with $26.9 million, or $2.05 per unit, in 2009. The Company concluded 2010 with a payout ratio of 47%, representing the lowest payout ratio since Canadian Helicopters’ initial public offering in 2005.
“By all financial measures, 2010 was a success for Canadian Helicopters, as it generated record results in both revenue and profit,” said Don Wall, President and Chief Executive Officer of Canadian Helicopters. “We looked increasingly outward to opportunities beyond our established markets, and made our first acquisition in the United States. We maintained a strong balance sheet, and had unused credit facility at year-end. Our ongoing operations in Afghanistan won us high regard and additional contracts, and helped drive a particularly strong performance in the fourth quarter of 2010. It was a year of solid achievement that we believe will contribute significantly to long-term shareholder value.”
Canadian Helicopters ended 2010 in a strong financial position with cash and cash equivalents of $42.9 million and unused credit facility. As at December 31, 2010, the Company had $40.0 million available under its revolving operating credit facility, while combined cash and credit facility amounted to $82.9 million.
FOURTH-QUARTER RESULTS
Revenue reached $43.0 million in the fourth quarter of 2010, up 36.9% from $31.4 million in the corresponding period in 2009. VFR revenue increased $11.3 million primarily due to contracted work in Afghanistan. IFR revenue declined $1.1 million as a result of reduced customer activity in the oil and gas industry. Finally, ancillary revenue increased $1.4 million
primarily due to the consolidation of Heli-Welders and Nampa Valley Helicopters maintenance revenues since June 4, 2010. Revenue-flying hours increased 4.1% to 10,990 hours.
Reflecting a more favourable revenue mix and increased hours flown, EBITDA amounted to $6.0 million, as opposed to negative EBITDA of $125,000 a year earlier, while earnings before non-controlling interest totalled $4.4 million, or $0.33 per share/unit, in the fourth quarter of 2010, versus $2.7 million, or $0.20 per unit, last year. Cash flows related to operating activities before net changes in non-cash working capital balances reached $6.1 million, up from $2.9 million a year ago. Distributable cash stood at $6.0 million, or $0.46 per share/unit, in the fourth quarter of 2010, compared with $2.9 million, or $0.22 per unit, last year.
DISCLOSURE OF 2011 FIRST QUARTER RESULTS
Exceptionally, and as permitted under securities legislation in connection with the first interim report to be filed in the year of adopting IFRS, the Company expects to release its 2011 first quarter results for the period ending March 31, 2011, on June 9, 2011, after market close.
OUTLOOK
“We are confident in regard to sustaining our strong financial performance in the year ahead. Our operations in Afghanistan should continue to generate significant revenue, and in anticipation of the postwar period, we are working towards deployment of aircraft to support reconstruction efforts. In our domestic market, with many economic indicators in Canada having turned positive, we are optimistic that demand for our transportation services will return to higher levels. Most specifically, we are well positioned for what we expect will be a progressive upturn in the mining sector. With high cash reserves, we are poised to leverage our assets. We are studying acquisition and redeployment initiatives to further our
diversification strategy, both service-wise and geographically. Going forward we are intent on extending the range of Canadian Helicopters,” concluded Mr. Wall.
CONFERENCE CALL
Canadian Helicopters will hold a conference call to discuss these results on March 23, 2011 at 11:00 AM (ET). Interested parties can join the call by dialing 416-644-3425 (Toronto) or 1-877-974-0445 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-640-1917 (local) or 1-877-289-8525 (toll free) followed by access code 4424915 followed by #. This tape recording will be available until March 30, 2011.
ABOUT CANADIAN HELICOPTERS GROUP INC.
Through Canadian Helicopters Limited, Canadian Helicopters Group Inc. is the largest helicopter transportation services company operating in Canada and one of the largest in the world based on the size of its fleet. From over 35 base locations across Canada, Canadian Helicopters provides helicopter services to a broad range of sectors, including infrastructure maintenance, utilities, oil and gas, mining, forestry, construction, and emergency medical services. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. With over 60 years of experience, Canadian Helicopters is an industry leader in establishing safety standards and operating procedures.
