U.S. military contract boosts revenue at Canadian Helicopters fund
Last Updated: Wednesday, May 13, 2009 | 9:26 AM ET
CBC News
Canadian Helicopters Income Fund said Wednesday its revenues rose by almost six per cent in the first quarter, partly due to a flying contract with the U.S. Department of Defence in Afghanistan.
The fund's revenue hit $26.5 million, up from $25 million a year ago. The fund said its support contract for the U.S. Department of Defence offset weaker resource-based activity.
Montreal-based Canadian Helicopters said its revenue-flying hours declined 11.1 per cent to 9,422 hours, but a more favourable mix of helicopter transportation services produced stronger revenue.
The contract with the U.S. military involves three fully crewed Bell 212 aircraft for the shipment of supplies and passengers in Afghanistan. The deal is for a one-year base period with four one-year extensions at the military's option. Total revenue to the fund is expected to exceed $120 million US over five years, assuming all the options are exercised and expected hours are flown.
The fund, which says it is the largest helicopter transportation services company operating in Canada, said it produced a loss of $405,872, or a loss of four cents per unit. That compared to a loss of $1.1 million, or 11 cents a unit, a year earlier.
"While demand from the natural resources sector will be weaker this year, our recent diversification initiatives, both abroad and domestically, will temper our exposure to the sector," said Jean-Pierre Blais, the president of the fund, in a statement.
"As a large proportion of our services are essential in nature, and therefore less subject to extreme volatility of the economy, we believe we remain well-positioned to generate positive levels of revenue and solid profits," he said in the company's earnings report.
