Era Group sees earnings fall over 2012

Era GroupEra Group has announced results for the first time after being spun off from SEACOR Holdings and despite a very strong fourth quarter, its 2012 profits were down compared to the year before.

Although sales in 2012 increased to $273 million, compared to $258 million in 2011, the company made a profit of $32 million for the year; less than the $36 million it made in 2011. However, this was mainly due to smaller gains on helicopter sales in 2012. In 2011 it made $15.2 million by selling helicopters compared to $3.6 million in 2012.

Adjusted EBITDA was $78.8 million for 2012 compared to $82.2 million for the prior year.

“With our spin-off completed at the end of January, Era Group has entered a new phase in its long and storied history,” said Sten Gustafson, CEO of Era Group. “As a newly independent, publicly traded company, we are better-positioned to achieve our growth objectives. As we look forward to 2013, we are encouraged by the continued resurgence of the U.S. Gulf of Mexico.”

Gustafson says that the grounding of Eurocopter EC225s, following two ditching’s in the North Sea, continues to cause problems. “With no definitive time-line in place for the EC225 to return to service, a reduction or cancellation of customer contracts for those EC225 helicopters that we operate and for those operated by our contract-lease customers around the world could have an adverse effect on our financial results. During this challenging time, the operational capabilities of the AW139 helicopter have been demonstrated with great effect in serving to fill the needs of our EC225 customers.”

Era Group is the largest owner and operator AW139 helicopters in the world servicing the offshore oil and gas industry. Gustafson says: “We have seen an increase in our AW139 utilization, particularly in Brazil where we have activated all of our previously idle AW139s, which means that all of our AW139s are now actively working and generating revenues for the company.”

Strong fourth quarter

The last three months of 2012 were strong for Era with the company booking operating income for of $9.7 million on operating revenues of $70.9 million. This compared to income of $1.5 million on revenues of $61.7 million for the last quarter of 2011.

Adjusted EBITDA was $21.2 million for the last quarter of 2012 compared to $13.8 million in 2012.

Operating revenues from oil and gas activities were $10.3 million higher due to newly delivered medium and light-twin engine helicopters being placed on contract, an expansion of government services support and increased charter activity for medium helicopters.

Sales from contract-leasing were $1.7 million higher due to new contract-leases for medium and heavy aircraft. Air medical services fell by $2.6 million when a long-term hospital contract.

Costs rose $1.2 million due to an increase in personnel and fuel costs and an increase in insurance costs due to an increase in the overall fleet value.

The company spent less on repairs and maintenance costs, mainly due to the recognition of maintenance credits received in connection with the end of two customer contract-leases and a decrease in power-by-hour expense as a result of a reduction in EC225 hours flown. However several helicopters not on maintenance contracts did undergo repairs.

Terry Spruce

Terry is Senior News Editor and writes for both Corporate Jet Investor and Helicopter Investor. He is also responsible for our helicopter guides. Terry has been an aviation enthusiast since the early 1970s. He is a lapsed Private Pilot and ex-Piper Cherokee owner. He has flown a number of light aircraft and is comfortable sitting in the co-pilot's seat or the back of any aircraft. Before moving to journalism he was a banker for 20 years. You can contact him at: terry@corporatejetinvestor.com or follow him on twitter @Terry_Spruce

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