Brazilian aircraft manufacturer Embraer has released its performance details for the third quarter 2023.
One of the standout highlights in the Q3 report is the phenomenal growth in the Commercial Aviation segment, boasting a 68% year-over-year increase and a 52% growth year-to-date.
Q3 2023 Highlights
In overview, here are some of the key highlights:
Deliveries Soar
Embraer kicked off Q3 2023 by delivering a total of 43 jets, comprising 15 commercial aircraft and 28 executive jets (consisting of 19 light jets and 9 mid-size jets).
This achievement represents a significant increase of 30% compared to the same period in 2022.
Looking at the year-to-date statistics, Embraer has delivered 105 aircraft, marking a remarkable 33% increase from the previous year’s 79 aircraft.
Revenues
Embraer’s financial success in the third quarter was no less impressive. The company reported revenues of US$1,284 million, which is a staggering 38% higher than in Q3 2022.
This figure matches their second-quarter revenues, demonstrating strong consistency. The year-to-date revenues show a substantial increase of 29% compared to the same period last year.
Strong Growth in Commercial Aviation
One of the standout highlights in the Q3 report is the phenomenal growth in the Commercial Aviation segment, boasting a 68% year-over-year increase and a 52% growth year-to-date.
This segment is a clear driver of Embraer’s success, with strong sales and higher volumes contributing to this outstanding performance.
Record-Breaking Backlog
Embraer’s firm order backlog at the end of Q3 2023 reached an impressive US$17.8 billion, the highest level in a year.
This remarkable achievement is primarily attributed to increased sales in Commercial Aviation, which saw the backlog rise from US$8 billion to US$8.6 billion compared to Q2 2023.
Notably, this segment has already sold 42 aircraft in 2023. Additionally, the Services & Support segment reached a historic high of US$2.8 billion in the quarter.
Revenue and Gross Margin
Embraer’s consolidated revenue in Q3 2023 was US$1,284 million, reflecting a substantial 38% year-over-year increase. This growth was primarily driven by the outstanding performance of Commercial Aviation, which saw a remarkable 68% increase.
The Defense segment also played its part with a 40% increase, while the Executive and Services segments contributed with 25% and 24% growth, respectively.
Year-to-Date Revenue Rise
Comparing the revenues from January to September 2022 with the same period in 2023, the total revenue rose by 29%. Commercial Aviation was the standout performer with an impressive 52% increase, followed by Executive Aviation with 28%, and Services & Support and Defense with 16% and 15% growth, respectively.
Commercial Aviation Takes Flight
In Q3 2023, Embraer delivered 15 commercial jets. The segment reported a substantial revenue growth of 68% year-over-year, amounting to US$424.9 million.
This remarkable performance was driven by a higher number of deliveries, resulting in a gross margin increase from 5.4% in Q3 2022 to 6.5% in Q3 2023.
Expanding Horizons in China
Embraer’s E195-E2 jet, the largest in the E-Jet family, received Type Certification from the Civil Aviation Administration of China (CAAC).
This significant achievement paves the way for Embraer to enter the Chinese market, adding to the existing aircraft manufactured in the country.
SkyWest’s Order
SkyWest placed an order for 19 new E175 jets to operate in the United Airlines network, complementing the 90 E175 jets already in operation with the airline.
This order is part of the Q3 backlog, with deliveries set to commence in Q4 2024.
Air Peace’s Firm Order
Air Peace, West Africa’s largest airline, placed a firm order for five Embraer E175 jets. These 88-seat jets are scheduled for delivery from 2024 and will enhance the Nigerian company’s existing fleet, which already includes the E195-E2.
Sustainability Partnership with American Airlines
In a forward-looking move, Embraer signed a Memorandum of Understanding (MoU) with American Airlines.
This partnership aims to define and establish real-world requirements for sustainable, emission-free, and commercially viable aviation, reinforcing their commitment to a greener future.
Executive Jets
In Q3 2023, Embraer’s Executive Aviation segment delivered 19 light jets and 9 mid-size jets, totaling 28 aircraft.
This represents a 22% increase compared to the same period in 2022. The segment’s revenues reached US$339.9 million, marking a substantial 25% increase compared to Q3 2022.
Phenom 100EX Unveiled
Embraer made waves at NBAA (National Business Aviation Association) by announcing the Phenom 100EX, their latest evolution in executive aviation.
This innovative aircraft offers superior cabin comfort, operational versatility, and safety-enhanced pilot-centric avionics, promising the ultimate flying experience.
Sustainable Initiatives
Embraer is committed to a more sustainable future. In line with this commitment, they successfully tested the Phenom 300E and Praetor 600 on 100% neat sustainable aviation fuel (SAF).
This test, with one engine running on 100% SAF, provides valuable insights into the performance of systems when utilizing up to 100% SAF.
Defense & Security
Embraer’s Defense & Security segment is making significant strides, with three more European countries, Czech Republic, Austria, and the Netherlands, selecting their aircraft as a preferred solution. These negotiations represent substantial potential for Embraer in the coming quarters.
Milestone Achieved
In September, the KC-390 Millennium achieved a milestone by completing 10,000 flight hours while operating under the Brazilian Air Force (FAB).
The operational availability of the existing fleet of six aircraft is at 80%, with a mission completion rate exceeding 99%.
Embraer, in collaboration with the Brazilian Army, also successfully completed the first test of the M200 Vigilante radar. This included deploying the equipment on the KC-390 Millennium aircraft from the Brazilian Air Force (FAB).
Outlook
With a firm order backlog of US$17.8 billion at the end of Q3 2023, Embraer is positioned for a promising future.
Their delivery performance in Q3 was stellar, with a 30% increase compared to the same period in 2022. Commercial Aviation and Executive Aviation both contributed significantly to this success.
Operational and financial guidance for 2023 accordingly remains unchanged.
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