Aircraft manufacturer Embraer expects its net revenue to increase in 2023 compared to the previous year, as it projects a gradual improvement in supply chain disruptions and an increase in aircraft deliveries, the company said on Friday (10).
The company said it expects to achieve net revenue of between $5.2 billion and $5.7 billion this year, which would represent growth of up to 27%. In 2022, Embraer reached the lower limit of its revenue estimate, which varied between US$ 4.5 billion and US$ 5.0 billion.
The new projection comes at a time when Embraer, the third largest aircraft manufacturer in the world – behind Boeing and Airbus – is aiming for growth, after years of recovery due to the Covid-19 pandemic and a failed transaction with Boeing in commercial aviation, Chief Executive Francisco Gomes Neto said in an interview with Reuters.
“Our ‘turnaround’ has been completed,” he said. “After the pandemic and the ‘deal’ with Boeing, 2021 and 2022 were years of recovery. Starting in 2023, we will have years of growth.”
Embraer had already announced deliveries of 159 aircraft in 2022, reaching the target for executive jets, but falling slightly below its projection for commercial jets.
Last year was marked by deliveries concentrated in the fourth quarter and interruptions in the supply chain, a factor that Gomes Neto expects to improve in 2023, although a complete normalization should only occur next year.
In 2023, Embraer said, the commercial aircraft unit is expected to deliver 65 to 70 jets, up from 57 last year, while sales should also perform strongly, as travel volume recovers from the pandemic. The company expects to restore the order backlog to pre-2020 levels.
Recent Embraer deals include a firm order for six E195-E2 jets from low-cost airline SalamAir of Oman, as well as a deal for 20 aircraft with Porter Airlines of Canada, a customer order for 15 E195-E2s undisclosed and a new order for five jets from the Spanish company Binter.
“I haven’t seen a ‘pipeline’ (of sales) like this for some time”, said Gomes Neto, adding that he expects another busy fourth quarter for the company in 2023, as some supply problems are still in sight.
Deliveries of executive jets, in turn, should jump up to 27.5% in the year, to a level between 120 and 130, the company said.
Embraer also maintained its free cash flow projection of US$ 150 million or more for this year.
In 2022, the company started with an estimate of US$ 50 million or more, but ended the year with a total of US$ 540 million.
“We had a lot of challenges in 2022 — the war in Ukraine, inflation, supply chain restrictions. But we delivered basically all the ‘guidances’”, said Gomes Neto. “Free cash flow was the icing on the cake.”
Source: CNN Brasil
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