October 19, 2023
NAV CANADA today released its financial results for the year ended August 31, 2023.
The Company saw air traffic levels for fiscal 2023, as measured in weighted charging units(1), increase 18.1% on a year-over-year basis. In comparison to pre-pandemic levels in fiscal 2019 however, weighted charging units were 7.3% lower. The Company’s revenue for fiscal 2023 was $1,778 million as compared to $1,507 million in fiscal 2022.
The Company had free cash flow(2) of $350 million in fiscal 2023 as compared to free cash flow of $175 million in fiscal 2022. The increase in free cash flow in fiscal 2023 is largely attributable to higher receipts from customer service charges.
“NAV CANADA’s financial position has improved over the course of the fiscal year due to sustained air traffic levels and responsible cost management, which has enabled us to repay a portion of the Company’s long-term debt and propose a service charge reduction. Looking to the horizon, NAV CANADA will continue to work on its long-term strategic direction to further enhance safety, increase resiliency, and manage system costs by investing in world-leading technologies, leveraging partnerships with our customers and stakeholders and continuing to build a strong company culture.”
Operating expenses for fiscal 2023 were $1,493 million as compared to $1,416 million in fiscal 2022. The increase is largely due to salaries and benefits expenses as a result of increased staffing and wage levels in fiscal 2023.
Net other income and expenses for fiscal 2023 were a net expense of $124 million as compared to a net expense of $183 million in fiscal 2022. During fiscal 2023, the Company recorded a $33 million (U.S. $25 million) non-cash reduction to the fair value of its investment in preferred interests of Aireon LLC as compared to a non-cash reduction of $82 million (U.S. $63 million) recorded in fiscal 2022. Finance income in fiscal 2023 was $28 million, as compared to $5 million in fiscal 2022, primarily due to higher cash and short-term investment balances and an increase in interest rates.
The Company had a net income (before net movement in regulatory deferral accounts including rate stabilization) of $161 million in fiscal 2023 as compared to a net loss of $79 million in fiscal 2022.
The Company is subject to legislation that regulates its approach to setting customer service charges. The timing of the recognition of certain revenue and expenses recovered through customer service charges is recorded through movements in regulatory deferral accounts. The net movement in regulatory deferral accounts for fiscal 2023 was an expense of $161 million as compared to income of $79 million in fiscal 2022. This change in regulatory deferrals is primarily due to favourable rate stabilization adjustments of $232 million in fiscal 2023 as compared to favourable adjustments of $82 million in fiscal 2022, along with a net decrease of $90 million in adjustments to align the accounting recognition of certain transactions to the periods in which they will be considered for rate setting.
The Company’s Financial Statements, Management's Discussion and Analysis and Annual Information Form for the year ended August 31, 2023 can be found at:
NAV CANADA is a private, not-for-profit company, established in 1996, providing air traffic control, airport advisory services, weather briefings and aeronautical information services for more than 18 million square kilometres of Canadian domestic and international airspace. The Company is internationally recognized for its safety record, and technology innovation.
(1) Weighted charging units represent a traffic measure that reflects the number of billable flights, aircraft size and distance flown in Canadian airspace and is the basis for movement-based service charges, which comprise the vast majority of the Company’s revenue.
(2) Free cash flow is a non-GAAP financial measure used by the Company to enhance the overall understanding of its financial and operating performance. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines free cash flow as cash generated from operations, less capital expenditures (net of government grants received), investments in regulatory assets, investments in Aireon LLC and equity related investments and principal payment of lease liabilities. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company’s financial resources and provides users with a more stable indication of the Company’s ability to meet its debt obligations and continue to invest in the air navigation system.
This press release contains certain forward-looking statements that are subject to important risks and uncertainties. Actual results may differ materially from the results indicated in these statements for a number of reasons. NAV CANADA disclaims any intention to update any forward-looking statements.