Brazil-based aircraft manufacturer, Embraer SA, released its financial results for the first quarter of 2020 (ending March 31st, 2020) on Monday, June 1st, 2020. The manufacturer’s revenue for the quarter stood at $633.8 million after having delivered 14 jets, three more than the previous year. Embraer delivered five commercial and nine executive jets, which left it with a firm order backlog of $15.9 billion at the end of Q1 2020.
However, the company reported a net loss of $292 million, an EBIT (Earnings Before Interest and Tax) of $(46.9) million and an EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) of $9.3 million, yielding an EBIT margin of -7.4% and EBITDA margin of 1.5%. These figures compare to an EBIT of $(15.2) million and EBITDA of $30.9 million for Q1 2019. Deliveries have been negatively affected due to the COVID-19 pandemic and the collapse of the Master Transaction Agreement between the firm and American aircraft manufacturer Boeing Company. To deal with the negative effects of the global health crisis on its business, Embraer has placed most of its Brazil-based employees on paid leave, which has in part led to an almost 10% increase in consolidated gross margins over the similar period last year.
The aforementioned deal for the joint venture between Boeing and Embraer was abruptly terminated by Boeing in April this year as it claims that Embraer did not satisfy the terms of the agreement. The Brazilian manufacturer has however rubbished these claims and rejected them as grounds for cancellation.