Bombardier has reported strong financial results for its second quarter ended June 30, 2024.
During that period, its total revenues increased 32 percent year-over-year to US$2.20 billion from US$1.68 billion.
Bombardier delivered 39 aircraft during Q2/24, a 34 percent improvement from the 29 delivered in Q2/23. The most recent quarter’s number included 19 Globals and 20 Challengers. Two of the Globals were originally scheduled for delivery during Q3/24.
Service revenues during the quarter reached US$507 million, an 18 percent increase from the US$428 million realized during Q2/23. They represented 23 percent of Bombardier’s total revenues during the most recent quarter. This segment’s performance is important to track, as it is a key part of the company’s growth strategy.
The company’s gross profit during the quarter increased by 20 percent year-over-year to US$444 million from US$371 million. Its operating income (defined as Earnings Before Interest and Taxes) declined to US$191 million from US$245 million.
The year earlier number included a gain of US$58 million from the disposal of commercial business related to the Airbus A220 program. On an apples-to-apples basis, the Q2/24 EBIT of US$191 was slightly ahead of Q2/23’s US$187.
During Q2/24, there was free cash flow usage of US$68 million, representing US$31 million related to operating activities and US$37 largely associated with property, plant and equipment (PP&E).
This was an US$154 million lower usage number compared to the year-earlier quarter when major work was being done on the new Global manufacturing plant at Mississauga.
With available liquidity of US$1.3 billion, including cash and equivalents of US$1.0 billion, the company’s financial situation was stable as of June 30, 2024.
Bombardier’s improving financial performance has once again been recognized by leading credit rating agencies. In May 2024, Moody’s Investors Services upgraded the company’s issuer rating from B2 to B1. It had been at B3 a year earlier. As well, S&P Global Ratings upgraded its rating from B to B+ in June 2024. It had been at B- a year earlier.
The company reported that it had strong aircraft order flow during the most recent quarter, and that interest in the Global family of jets was noteworthy. With a book-to-bill ratio of 1:1, the order backlog on June 30, 2024 stood at US14.9 billion – unchanged from the level three months earlier.
That number represents approximately 18 to 24 months of production, depending on the model. Furthermore, it is comprised of a healthy mix of traditional customers that include corporations, families, fleet operators and governments.
One aspect of Bombardier’s business worth monitoring is its growing defense-related activities. There has been a growing interest in the use of Challenger 650s and Global 6500s as surveillance aircraft by major military organizations around the globe.
These Q2/24 financial results confirm that the company is on track to achieve its targets for 2024 and 2025. It should be noted that, as in 2023, a significant percentage of the full year aircraft deliveries (at least 40 percent) are expected to be made during the final quarter. With its impressive backlog, strong order flow for its products and services and an ever improving balance sheet, Bombardier’s financial turnaround remains an exciting story.
