Embraer has reported improved results for the second quarter and first six months of 2023 but was still loss-making. The consolidated net loss attributable to shareholders for Q2 was $-18.8 million compared to $-146.4 million last year. Without extraordinary effects, the adjusted net income for the quarter would have been $57.9 million versus $46.2 million last year.
Embraer reported an increase in revenue to $1.292bn from $1.019bn. Adjusted EBIT was $99.9 million versus $81.2 million due to positive operating profit of $73.2 million compared to a $-227.1 million loss, lower costs associated with eVTOL subsidiary Eve Air Mobility, the absence of costs related to warrants for Eve, and no impairment on the sale of assets.
The group reported an adjusted EBIT margin was 7.7% compared to 8.0% last year. Free cash flow was at break-even at $10.7 billion and was affected by higher inventories due to increased deliveries.
Embraer Q2 revenues for commercial aviation increased 57% to $471.9 million from $299.9 million, mostly due to the deliveries of seventeen aircraft compared to just eleven deliveries recorded same quarter of 2022. One-time effects had a slight impact on the gross margin, which was down 0.3 percentage points to 12.9 percent.
Embraer Executive Jet revenue jumped 42% higher in Q2 with $378 million, up from $266.6 million due to thirty deliveries as compared to just 21 deliveries last year.
In the H1 of 2023, Embraer reported consolidated net loss of $-89.6 million compared to a $-178.1 million net loss in 2022. Embraer restated the original Q2/HY1 2022 results in November. The original earnings release in August 2022 showed a $42.5 million net profit for H1. The Adjusted net income was $-31 million versus $-29.2 million. Revenues improved to $2.009 billion from $1.620 billion. Adjusted EBIT was $68.3 million versus $54.1 million, with the margin almost on par at 3.4 versus 3.3%.
In H1, Embraer did 24 deliveries increasing its revenue to $670.7 million from $469.1 million last year while executive aviation reported 38 deliveries compared to 28 in H1 of 2022, with revenue of $465.1 million versus $356.6 million reported in H1 of 2022. The Embraer services and support also posted an increase in revenue from $591.3 million last year to $665.9 million.
Excluding Eve, Embraer ended June with $1.4.59 bn in net debt compared to $1.529 bn a year ago. Embraer has reprofiled its debt, resulting in extended maturities through 2030, with issuing a new $750 million bond. Embraer’s total cash at the end of H1, 2023 stood at $2.945 billion.
The total backlog stood at $17.3 billion, down from $17.4 billion in Q1 and $17.5 billion in Q4 last year. The order backlog of commercial aviation was at 2.203 E-Jets of $8.0 billion by late June.
Embraer says that it will add $700 million in firm sales to the Q3 backlog. Executive Jets had a $4.3 billion backlog, thanks to the order from NetJets for 250 Praetors and a book-to-bill ratio of 2:1.