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Embraer S.A. (NYSE: ERJ; B3: EMBR3) is a leading Brazilian multinational aerospace manufacturer with its headquarters in São José dos Campos, São Paulo. Established in 1969, the company specializes in designing, developing, and manufacturing a wide range of aircraft, including commercial, military, executive, and agricultural aircraft, and offers comprehensive aeronautical services.
Business Segments:
- Commercial Aviation: Embraer is renowned for its E-Jets family, which has seen a significant increase in deliveries, particularly the E2 group. In 2023, the company delivered 64 commercial jets, marking a 12% increase from the previous year.
- Defense and Security: Embraer's C-390 Millennium has been a standout, recently winning South Korea's Large Transport Aircraft public tender. The aircraft is recognized for its reliability and multi-mission capability, including cargo transport, medical evacuation, and firefighting.
- Executive Aviation: Embraer offers a range of business jets, including the Phenom 100EX, Phenom 300E, Praetor 500, and Praetor 600. The company is expanding its MRO facilities in the U.S. to support the growing customer base.
- Service and Support: This segment has shown robust growth with a backlog of US$3.1 billion, driven by renewed contracts and innovative solutions like the Pool Program and Embraer Executive Care.
Key Achievements and Projects:
- Embraer delivered 181 aircraft in 2023, up 13% from 2022, with a significant backlog of US$18.7 billion.
- Successful entry of the first NATO-configured KC-390 Millennium for the Portuguese Air Force.
- Expansion of executive jet MRO facilities in Dallas, Cleveland, and Sanford in the U.S.
Financial Performance and Outlook:
Embraer has shown a steady financial performance with continued growth across its various segments. The company reported a 13% YoY increase in its backlog to US$21.1 billion in 1Q24. Despite facing supply chain delays, the company remains committed to stabilizing its production levels and meeting customer demand. With a focus on innovation, customer satisfaction, and long-term relationships, Embraer is poised for sustained growth and strategic expansion in the global aerospace market.
On November 30, 2020, Embraer S.A. reported a cyberattack impacting its IT systems, traced back to November 25. The breach resulted in unauthorized data disclosure and temporarily made some file access unavailable. The company launched an investigation and isolated certain systems to protect its operations, leading to minor disruptions. Despite these challenges, operations continue through contingency systems without any material impact on business activities. Embraer is committed to investigating the attack and will keep stakeholders informed of developments.
The Hungarian Government has signed a contract with Embraer for the acquisition of two C-390 Millennium multi-mission transport aircraft, configured for air-to-air refueling (AAR). The deal includes training for pilots and technicians and aims to strengthen the Hungarian Defence Forces' capabilities in tactical airlift and medical evacuation. Deliveries are expected to commence in 2023. The KC-390, which will be the world's first with an Intensive Care Unit configuration, enhances Hungary's military operations and is compatible with NATO standards.
OGMA, part of the Embraer Group, has joined Pratt & Whitney's Authorized Maintenance Center network, focusing on GTF (Geared Turbofan) engines. This partnership involves a €74 million investment from OGMA, aiming to create approximately 300 jobs over the next few years. The maintenance project is set to start in 2021 and is projected to boost OGMA's turnover to nearly €600 million annually. The collaboration highlights OGMA's capabilities and Embraer’s strategy to diversify its services in the international aerospace market.
Embraer S.A. (NYSE: ERJ) reported its 3Q20 earnings with challenges due to the COVID-19 pandemic. The company delivered 7 commercial jets and 21 executive jets, maintaining a firm order backlog of US$ 15.1 billion. Adjusted EBIT was US$ (45.3) million, with an EBIT margin of -6.0%. Adjusted net loss reached US$ (148.3) million, translating to an adjusted loss per ADS of (0.81). Free cash flow was negative at US$ (566.5) million, yet liquidity remains solid with US$ 2.2 billion in cash. Financial guidance for 2020 remains suspended amid ongoing uncertainties.
Embraer (NYSE: ERJ) announced the delivery of 28 jets in Q3 2020, comprising 7 commercial and 21 executive aircraft. The total firm order backlog reached USD 15.1 billion as of September 30, 2020. Notable deliveries included the 250th business jet in operation in Latin America and the first Phenom 300E with a new interior. Helvetic Airways committed to convert four orders to the larger E195-E2 aircraft. Overall, Embraer delivered 59 jets in 2020, making significant progress in both commercial and executive aviation sectors.
Embraer S.A. (NYSE: ERJ) announced early results of cash tender offers by its subsidiary, Embraer Netherlands Finance B.V., for up to US$250 million of outstanding 5.150% notes due 2022 and 5.696% notes due 2023. As of the Early Tender Date on September 21, 2020, the total validly tendered amounts exceeded the Maximum Tender Amount, leading to prorating of the 2023 notes. Settlement for the accepted notes occurred on September 23, 2020. The Tender Offers will expire on October 5, 2020, unless extended.
On September 8, 2020, Embraer S.A. (NYSE: ERJ) announced a cash Tender Offer by its subsidiary, Embraer Netherlands Finance B.V., to purchase up to US$250,000,000 in aggregate principal amount of outstanding notes. The offer includes 5.150% notes due 2022 and 5.696% notes due 2023. The Tender Offers will expire on October 5, 2020, with an Early Tender Date of September 21, 2020. Participants who tender by the Early Tender Date will receive an Early Tender Payment. Conditions include the completion of new debt financing.
EMBRAER S.A. (NYSE: ERJ) reported its 2Q20 results, delivering four commercial and 13 executive jets, with a backlog of US$ 15.4 billion. Adjusted EBIT and EBITDA were US$ (140.5) million and US$ (120.4) million, reflecting a decline in commercial aviation. The adjusted net loss was US$ (198.8) million, or US$ (1.08) per ADS. Despite a US$ (476.2) million free cash flow, liquidity remains strong with US$ 2.0 billion in cash. Guidance remains suspended due to COVID-19 uncertainty.
Embraer (NYSE: ERJ) has finalized contracts with five banks for a total of US$ 300 million in working capital and export financing. This funding, which began disbursement in July 2020, will enhance the company's cash position for the remainder of 2020 and into 2021. The financing lines have maturities of two to four years and will support production until the products are shipped for export. Embraer is also exploring additional financing options to ensure a manageable long-term debt profile.
On July 20, 2020, Embraer (NYSE: ERJ) announced the delivery of 17 jets in Q2 2020, comprising 4 commercial and 13 executive jets. The firm's total order backlog reached USD 15.4 billion as of June 30. Despite the ongoing challenges posed by the Covid-19 pandemic, the company marked the delivery of its 1,600th E-Jet to Helvetic Airways, which also converted orders to larger aircraft. Additionally, Congo Airways adjusted its orders from E175 to E190-E2 jets. Embraer also delivered its third C-390 Millennium to the Brazilian Air Force.
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