Feb 9, 2023
Available cash flow will be prioritized for debt: Bombardier CEO
The Canadian Press
,Bombardier delivers bullish 2023 outlook
VIDEO SIGN OUT
Bombardier Inc.'s chief executive says the company remains determined to use available cash flow to pay down debt.
Sales of private aircrafts boomed amid the pandemic, which resulted in unprecedented demand within the industry, Éric Martel, president and chief executive officer, told BNN Bloomberg in an interview on Thursday.
The Canadian jet manufacturer posted a US$241-million profit in its fourth quarter, which it revealed in its last earnings report, released Thursday.
The profits can be seen in Bombardier's US$6.9-billion revenue last year, marking a 14 per cent rise year-over-year. The company forecasted this year's revenue to jump to US$7.6 billion on the expected delivery of at least 138 aircraft, alongside increased maintenance and repair services.
"I think we’ve been very clear with the market. As we have cash flow available, and money available, we will prioritize reducing our debt,” he said.
The pursuit to deleverage the company has happened faster than Bombardier once forecasted, as the company has now reduced its debt by 40 per cent within the last few years, Martel added.
As for future growth, he pointed to a rise in orders from fleet operators, alongside the increase in private aircraft orders by individual customers and corporations.
The expansion of Bombardier's business has one analyst calling for an increase in the company's 2023 free cash flow projections.
“We expect a neutral reaction at first glance given the conservative 2023 free cash flow (FCF) guidance (likely to be revised upward through the year in our view, similar to 2022),” Benoit Poirier, analyst at Desjardins Securities, wrote in a note to clients on Thursday.
Bombardier has forecasted FCF to come in above $250 million for this year, however Poirier is expecting US$425 million. The Wall Street consensus is for $US465 million.
Poirier is bullish on the stock as he noted the company's debt reduction in Q4 to be favourable for freeing up more cash and also pointed to an expected increase in Bombardier's capital expenditures (CapEx) as its Toronto Pearson International Airport facility comes to a completion.
"Additionally, we expect Bombardier to be in a position to increase its 2025 objectives at the upcoming investor day on March 23," he noted.
Poirier has a buy rating on shares of Bombardier and a 12-month price target of $82.
Sales of private aircrafts boomed amid the pandemic, which resulted in unprecedented demand within the industry, Éric Martel, president and chief executive officer, told BNN Bloomberg in an interview on Thursday.
The Canadian jet manufacturer posted a US$241-million profit in its fourth quarter, which it revealed in its last earnings report, released Thursday.
The profits can be seen in Bombardier's US$6.9-billion revenue last year, marking a 14 per cent rise year-over-year. The company forecasted this year's revenue to jump to US$7.6 billion on the expected delivery of at least 138 aircraft, alongside increased maintenance and repair services.
"I think we’ve been very clear with the market. As we have cash flow available, and money available, we will prioritize reducing our debt,” he said.
The pursuit to deleverage the company has happened faster than Bombardier once forecasted, as the company has now reduced its debt by 40 per cent within the last few years, Martel added.
As for future growth, he pointed to a rise in orders from fleet operators, alongside the increase in private aircraft orders by individual customers and corporations.
The expansion of Bombardier's business has one analyst calling for an increase in the company's 2023 free cash flow projections.
“We expect a neutral reaction at first glance given the conservative 2023 free cash flow (FCF) guidance (likely to be revised upward through the year in our view, similar to 2022),” Benoit Poirier, analyst at Desjardins Securities, wrote in a note to clients on Thursday.
Bombardier has forecasted FCF to come in above $250 million for this year, however Poirier is expecting US$425 million. The Wall Street consensus is for $US465 million.
Poirier is bullish on the stock as he noted the company's debt reduction in Q4 to be favourable for freeing up more cash and also pointed to an expected increase in Bombardier's capital expenditures (CapEx) as its Toronto Pearson International Airport facility comes to a completion.
"Additionally, we expect Bombardier to be in a position to increase its 2025 objectives at the upcoming investor day on March 23," he noted.
Poirier has a buy rating on shares of Bombardier and a 12-month price target of $82.