Embraer’s second quarter results contained a nice surprise – a profit. The Brazilian planemaker snagged better than expected revenue for the quarter, as deliveries of both executive and commercial aircraft increased from the previous quarter. Revenue grew 110.4% year over year, to $1.13 billion, netting it a profit of $43.6 million.
A welcome change for Embraer
There haven’t been many nice surprises in aviation for a while, given everything that’s happened over the past 18 months. Nevertheless, Embraer has set the tone for a strong recovery going forward, posting its first recurring profit since Q1 of 2018.
This time last year, Embraer was struggling to restructure its operations in the wake of the collapsed deal with Boeing. It had begun to feel the impact from COVID, and as such, posted a significant loss of 1.071 billion reais ($204 million). Now, the outlook couldn’t be more different.
Revenues in the second quarter of 2021 came in a $1.13 billion representing a year-over-year increase of 110.4% compared to the second quarter of 2020. That quarter was the lowest in revenue terms for the entire pandemic period, according to Embraer.
This uptick in revenue led to earnings before interest and tax (EBIT), excluding special items, of $104.7 million, with a margin of 9.3%. This is in stark contrast to where it was a year ago, when EBIT was a loss of $140.5 million and margins of -26.2%. The manufacturer says that the better profitability in this quarter was reflected across all its business units, and was down to a combination of more deliveries, more revenues and its efforts to improve cost efficiencies.
On the commercial aviation side, revenues more than tripled year on year, coming in at $388.5 million. The segment delivered more than a third (33.7%) of all Embraer’s income in the quarter. For the half, its contribution was even higher, representing 34.1% of all Embraer revenue.
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In the second quarter, Embraer delivered an impressive 14 commercial jets. Of these, seven were E175s and seven were the E195-E2 jet. This compares to just four commercial aircraft delivered in the same quarter last year, and takes its 2021 total up to 23 planes.
In the most recent quarter, Embraer received a significant order from Porter Airlines for 30 new E195-E2 jets, plus purchase rights for another 50. As well as this, 18 175s were ordered for Alaska Airlines, to be operated by Horizon Air and SkyWest.
Helvetic Airways took delivery of its first E195-E2 in the quarter, becoming the first airline in the world to operate both the E190-E2 and the E195-E2.
IN terms of its backlog, Embraer still has a significant order book. The biggest backlog is for the E195-E2, with 157 aircraft still to deliver. This is closely followed by the E175, with 141 in the backlog, rounded out with three E190s and five E190-E2s. This gives the planemaker a total of 306 E-Jets left to deliver.