Sukhoi’s civil aircraft division is revising forecasts for the Superjet 100 under a draft long-term business plan.
While the plan – drawn up in July and covering 2016-51 – has yet to be approved, it will assume several sales volume scenarios which “differ substantially” from the previous plan, according to financial firm Ernst & Young in a review of the airframer’s interim financial statement.
These changes could be an indication of “potential impairment”, it adds, but an impairment test cannot be completed until management has approved the revised sales forecast.
Sukhoi Civil Aircraft turned in a pre-tax loss of $123.7 million for the six months to 30 June, under international accounting standards.
The interim disclosure shows that Sukhoi delivered seven aircraft in the first half, compared with nine last year, resulting in an 8% fall in aircraft sales revenues to just under $160 million.
Despite the slump in revenues Sukhoi cut its cost of sales by a greater rate, reducing its gross loss, and the company’s overall net loss for the period was down by more than a quarter to $104 million.
“Negative financial results of the group were primarily driven by below-the-budget sales of aircraft on the Russian and international markets and executing onerous contracts,” says the financial review.
It adds that the Russian economy is continuing to be hit by the drop in oil prices and devaluation of the local currency. The resulting reduced access to, and higher cost of, capital plus higher inflation and uncertainty over economic growth “could negatively affect” the airframer’s financial position and business prospects.
The review notes that Sukhoi Civil Aircraft, at the half-year point, had breached certain covenants relating to credit line facilities, enabling the lenders to demand early repayment.
But it states: “Management believes it is taking appropriate measures to support the sustainability of the group’s business in the current circumstances.”
In August, following a Russian government restructuring decision, the company received a Rb100 billion ($1.6 billion) interest-free loan to repay borrowings and reinforce working capital.
Further measures are also being undertaken, says the review, to lift sales of Superjet 100s on the domestic market and improve the company’s finances. State leasing firm GTLK has recently signed an agreement covering 32 Superjets for lease to Russian regional operators.
“Debt restructuring and the government support measures on aircraft sales stimulation shall allow the company to continue as a going concern,” the review says.
Sukhoi Civil Aircraft is 94.47%-owned by the main Sukhoi company with the remaining 5.53% held by Finmeccanica-controlled World Wings. The ownership split between the companies had originally been 75:25.
Source: Cirium Dashboard
