CAE sees 2Q profits rise as civil training business grows

Canadian flight simulator and training supplier CAE anticipates continued growth in the global civil air transport training market, the company said Friday as it released its fiscal 2018 second quarter results.

CAE reported total revenue of C$646 million ($509 million) for the quarter compared with C$635.5 million in the second quarter last year. Net income was C$65.2 million compared to C$48.3 million last year. Excluding the gain on the sale of its stake in the Zhuhai Flight Training Center  (ZFTC) in China, net income in the second quarter would have been C$58.2 million.

Second quarter total segment operating income was C$109.3 million ($95.0 million before ZFTC gain) compared with C$85.8 million in the second quarter last year.

"Our performance in the quarter continues to support our full year outlook," CAE president and CEO Marc Parent said. "The high level of business activity we are experiencing adds to our confidence. In the quarter, we had continued strong results in civil.”

Second quarter civil revenue was C$349 million, down 2% compared to the same quarter last year. Segment operating income was C $77.1 million, which includes a gain on the ZFTC divestiture. Excluding this gain, segment operating income would have been C$62.8 million, up 16%.

During the quarter, civil signed training solutions contracts with a value of C$387.6 million, including long term training contracts with Iberia Airlines, Brussels Airlines and Endeavor Air. Also during the quarter, civil sold 11 full-flight simulators (FFSs), including a Boeing 777X FFS to Lufthansa Aviation Training, an Airbus A320NEO FFS and Boeing 737MAX FFS to Korean Air, and a Boeing 737MAX FFS to Fiji Airways. Civil sold 19 FFSs in the first half of the fiscal year.

CAE said it expects to see continued good growth in fiscal year 2018. In civil, the company expects to generate low-double digit percentage segment operating income growth.