NAV CANADA, Canada’s air navigation service provider, has published its financial results for the three and nine months ending May 31, 2024. The third quarter of fiscal 2024 saw a notable 5.6% year-over-year increase in air traffic levels, measured in weighted charging units. Despite this positive indicator, the company reported revenues of $433 million for the third quarter, slightly down from $436 million in the same period of fiscal 2023.
While free cash flow decreased to $17 million from $32 million in the previous year’s third quarter, this was primarily due to higher capital expenditures. The impact was partially mitigated by increased operating cash inflows compared to the previous year. NAV CANADA ended the quarter with a solid cash balance of $571 million.
“Partnering for success is a foundational concept to how NAV CANADA will achieve its long-term goals, and this concept featured strongly in the third quarter,” stated Raymond G. Bohn, President and CEO, NAV CANADA. “Our partnership with CAE brings two leading Canadian companies together to augment our training capacity, contributing to the future sustainability of operations and bringing more Canadians into our highly skilled workforce sooner. We celebrated the ground-breaking of our first LEED certified Control Tower with the Victoria Airport Authority and, more recently, have announced our technology partner that will support our Digital Aerodrome Air Traffic Services program. Our partners, customers and our people are at the heart of how we are building a resilient, innovative, and progressive organization which is ready to tackle future challenges.”
NAV CANADA’s operating expenses for the third quarter reached $418 million, an increase from $386 million in the same period of fiscal 2023. This rise was primarily driven by higher compensation costs due to increased wages and staffing levels. The net other income and expenses for the third quarter of fiscal 2024 showed a net expense of $19 million, an improvement compared to the $24 million net expense reported in the same period of the previous year. This positive change was attributed to lower net interest expenses.
For the third quarter of fiscal 2024, NAV CANADA recorded a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $5 million. This contrasts with a net income of $26 million reported for the same period in fiscal 2023. The net movement in regulatory deferral accounts for the third quarter of fiscal 2024 resulted in an expense of $27 million, down from an expense of $39 million in the same quarter of fiscal 2023. This change was primarily due to a decrease in favorable rate stabilization adjustments of $9 million and a $3 million net increase in adjustments necessary to align the accounting recognition of certain transactions with the periods they will be considered for rate setting. As of May 31, 2024, the rate stabilization account had a balance of $220 million, which will be recovered from customers through future service charges.
