Embraer’s Executive Jets Division has posted an increase in revenue to $271.7m in the third quarter (Q3) of 2022, up by 6% compared with Q3 last year.
The division accounted for more revenue than the commercial aviation side of the business this quarter, making up 26.8% of the group’s overall $1.02bn revenue.
The group sold 23 executive jets within the quarter, accounting for almost half of the business jets sold in the year-to-date (52). Of the 23 sold in Q3, 15 were light jets and the remaining eight were mid and super midsize jets. Embraer said Q3 was the second-best third quarter for executive aviation in the last decade.
Reported Q3 gross margin was down slightly compared with last year, at 19.7% this year and 21% in Q3 2021. But the gross margin is still up year-to-date at 20.6% in the first nine months of 2022 compared with 16.3% within the same time last year.
Group-wide, free cash flow in the quarter was negative $109.4m, mainly due to an increase in working capital because of higher deliveries in Q4 this year, which is expected to reverse to a positive trend.
The group also cut its debt by $0.53bn since Q3 last year, with the group finishing the quarter with $1.3bn debt. Embraer said the decrease in debt is a result of cash generation during the last four quarters. To ensure liquidity, Embraer obtained a revolving credit facility in October this year for up to $650m, as well as a credit transaction guarantee of $100m by JP Morgan and UK Export Finance to finance suppliers.
The group’s total backlog remained stable in Q3 at $17.8bn, the same as Q2 this year and up 6% compared with Q3 2021 when backlog was $16.8bn.
Embraer results at a glance:
- 23 executive jets delivered in Q3, 52 delivered year-to-date
- Executive Aviation revenue up 6% year-on-year to $271.7m
- Gross margin of 19.1% in Q3 compared with 19% in Q3 last year
- Free cash flow in Q3 was negative $109.4m
- Debt down $0.5bn since Q3 last year
