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Bombardier posts US$371.9 million Q2 loss, but Quebec bailout on the way

MONTREAL train and plane maker Bombardier posted a second quarter net loss of C$490 million (US$371.9 million) - after last year's net profit of C$125 million - drawn on revenues of C$4.3 billion, down 6.7 per cent year on year.

But on June 30, the Quebec provincial government in return for a 49.5 per cent stake in C Series Aircraft Limited Partnership (CSALP) came up with a C$1 billion.

"We received the first C$500 million instalment and the second C$500 million instalment is expected on September 1," said president and CEO Alain Bellemare.

"We continue to make very good progress executing our turnaround plan," he said.

"We delivered on our financial commitments, achieved our programme milestones and positioned Bombardier to meet both our full year guidance and 2020 goals."

"Having firmly placed Bombardier on a path to profitable earnings growth and cash generation, we remain focused on delivering customer and shareholder value by improving productivity, executing flawlessly on our programmes and applying a disciplined and proactive approach to our portfolio," said Mr Bellemare.

"These results place Bombardier on track to meet its full year guidance of revenues between C$16.5 billion and C$17.5 billion, EBIT [earnings before interest and taxes] between C$200 million and C$400 million, and free cash flow usage between C$1 billion and $1.3 billion," said a company statement.

In the first half of 2016, Bombardier delivered 73 aircraft and achieved a book-to-bill ratio of 1.0 validating the strategic decisions we took in 2015 to re-align aircraft supply to market demand, said the company.

"We also realised an improved EBIT margin before special items of 6.7 per cent in what continued to be a challenging market environment.

"As outlined in our latest 10-year forecast, we remain confident in the significant long-term growth potential of the industry primarily driven by wealth creation, globalisation of trade and replacement demand," said the company.

"The C Series aircraft programme is transitioning from the development phase to the revenue-generating phase, a historic milestone as we bring to market the first clean-sheet designed narrow-body aircraft in nearly 30 years," said the statement.

"On June 29, 2016, we delivered the first CS100 aircraft to launch operator Swiss International Air Lines (SWISS). The aircraft achieved successful entry-into-service on July 15, 2016 with its maiden commercial flight taking passengers from Zurich to Paris," it said.

"Recent significant orders totalling 127 firm orders and 80 options from Delta, Air Canada and airBaltic solidified the C Series aircraft programme in the 100- to 150-seat category. These firm orders are valued at C$9.9 billion based on list prices. The programme entered into service with a firm order backlog above our target of 300 aircraft.

"In the quarter, we signed a firm order for 10 CRJ900 aircraft with an undisclosed customer. Based on list price, the firm order is valued at $472 million," said the company statement.

Bombardier states it is the world's leading manufacturer of both planes and trains. In the fiscal year ended December 31, the company posted revenues of C$18.2 billion.