(Reuters) – Brazil’s Embraer SA <EMBR3.SA> is preparing for a “very challenging” 2021 as new coronavirus waves in the United States and Europe are appearing to delay a potential recovery in travel, Chief Executive Francisco Gomes Neto said on Tuesday.
The world’s No. 3 planemaker lost $121 million between June and September, the company said, as the pandemic’s first wave curbed travel, hitting demand for commercial jets and private planes.
Gomes Neto told analysts he did not expect sales in 2021 to be better than in 2020, with the company particularly weighed down by lagging commercial jet sales. So far this year, Embraer has already lost $728 million, and the company only expects growth to resume perhaps in 2022.
Shares fell 6% in Brazil on the news and the negative outlook, even as markets overall were up.
But Embraer said on Tuesday it had already delivered more planes in October than in all of the third quarter, a promising sign that could darken down the line if the resurging pandemic is not tamed.
Commercial jet revenue was the hardest hit, falling to $177 million in the quarter from $408 million a year ago as the pandemic ravaged commercial travel.
But the executive jets division, which some analysts believed would be a bright spot as the ultra rich would spend heavily to travel in isolation, also fell significantly. Executive jets revenue fell to $212 million from $363 million a year ago.
Its defense division, however, managed to grow its revenue on higher deliveries of military planes. Still, Embraer’s defense division remains a smaller business segment than the one making civilian planes.
The company said it burned through $567 million in cash during the quarter, which was offset by $750 million in new debt raised in the same period.
(Reporting by Marcelo Rochabrun; Editing by Louise Heavens and David Evans)
