Brazil’s Embraer sees revenue at top of range after pandemic recovery

Brazil’s Embraer SA has already won enough orders to meet the top end of its targeted revenue range for the current financial year, the planemaker said on Monday as it sees a bounce from a COVID-19 related downturn.

The positive outlook came after large revenue drops due to the pandemic and a failed deal in early 2020 for Boeing Co to take over its commercial aviation division, after which it was forced to reintegrate the unit.

The latest update comes only weeks after Embraer on April 28 reaffirmed its financial outlook for 2022, with revenue seen reaching between $4.5 billion and $5 billion.

Chief Financial Officer Antonio Carlos Garcia said on Monday the company already had enough orders to meet the top end of that range, though the outcome would still depend on its ability to deliver all aircraft ordered.

Embraer’s firm order backlog hit $17.3 billion at the end of the first quarter, the highest level since early 2018.

Garcia said Embraer is focused on reaching what it has already promised, adding that it “could be better” but supply chain constraints remained a potential drag.

The company’s 2023-2026 “fit for growth” plan, CEO Francisco Gomes Neto said, is based on pillars such as higher inventory usage and lowering the cost of goods sold.

The company expects to triple its inventory turnover as part of the plan and is well on its way to do so, he noted during an event, while also looking to achieve strong cash generation to finance projects with its own money.

The company is also confident that by next year it will regain its investment-grade credit rating.

Brazil-traded shares in Embraer were up 1% at 12.81 reais in morning trading, outperforming the broader Bovespa stock index which fell 0.1%.

Reuters.com by Gabriel Araujo; Editing by Jason Neely and David Holmes