Bombardier Inc. reported its financial results for FY2020 on February 11 when it revealed that its EBIT had dropped by 22% to $937mn vs. $1,194mn for 2019. The adjusted EBITDA and adjusted EBIT for the company were down 124% and 65% YoY respectively. The company reported an adjusted EBIT of -$125mn (negative) vs. $531mn last year and an adjusted EBITDA of $286mn vs. $812mn last year. Business aircraft deliveries were down to 114 from 142 last year and its commercial aircraft deliveries stood at a meager 5 units against 33 in the previous year. The good news for the Montreal-based planemaker was that its revenues had seen a marginal increase of 3% to $5,593mn from $5,417mn the year before and the company has started 2021 with cash and cash equivalents of $5.4bn that included cash on hand of $1.8bn and $3.6bn of proceeds from the recently closed sale of Transportation. The company aims to take measures to drive profitability and targets savings of ~$400mn annually by 2023. It plans to halt the production of the Learjet in Q4 2021 with an aim to focus on the more profitable Challenger and Global aircraft lines and also reduce its overall workforce by ~1,600.

Éric Martel, President and Chief Executive Officer, Bombardier Inc said, “With more than 3,000 aircraft delivered since its entry-into-service in 1963, the iconic Learjet aircraft has had a remarkable and lasting impact on business aviation…However, given the increasingly challenging market dynamics, we have made this difficult decision to end Learjet production,” while adding, “Workforce reductions are always very difficult… But these reductions are absolutely necessary for us to rebuild our company.” The company also presented the outlook for 2021 in which it said that it is repositioning to a “pure-play business aviation company” and expect to increase the adjusted EBITDA  to greater than $500mn and $100mn respectively.

Bombardier’s bonds were mostly in the red with its 7.45% 2034s down 7.75 to trade at 90 cents on the dollar while its 7.5% 2025s were down 5.66 to trade at 90.34 on the secondary markets.
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