Embraer has delivered ten commercial jets and 23 executive jets (15 light / eight mid/super-midsize jets) in the third quarter of 2022 (3Q22), bringing year-to-date deliveries to 27 commercial jets and 52 executive jets (33 light /19 mid/super-midsize jets). Although deliveries have been backended to the fourth quarter of 2022 due to supply chain challenges, they are close to historical average for the quarter.
The company reported a 3Q22 consolidated gross margin of 19.1% compared to 19.0% reported in 3Q21. Adjusted EBIT and EBITDA were US$50 million and US$93 million, respectively, yielding adjusted EBIT margin of 5.4% and adjusted EBITDA margin of 10.0%.
Free cash flow (FCF) in 3Q22 was negative US$109.4 million, mainly explained by working capital increase due to higher deliveries in 4Q22 which will reverse to a positive trend.
The company finished the quarter with net debt of US$1.275 billion, or US$0.53 billion less than 3Q21 in line with the strategy to reduce interest expenses.
A revolving credit facility of up to US$650 million with 14 financial institutions was signed to increase the company’s liquidity and improve its capital structure, following Embraer liability management strategy, or reducing gross debt and interest expenses.
Embraer reaffirmed all aspects of its 2022 financial and deliveries guidance, with an increase in its free cash flow guidance from US$50 million or better to US$150 million or better. (£1.00 = US$1.18 at time of publication)