Embraer has produced its promised turnaround, coming close to breakeven last year and likely to show its first profits for seven years in 1998.
The overall result for 1997 showed the Brazilian manufacturer with a net loss of $13.2 million, stemming from heavy costs in the first half of the year resulting from the production ramp up for its ERJ-145 regional jet. That was compounded by delivery delays for two aircraft because of a hold-up in European type certification.
The costs resulted in a loss of $52 million over the first six months of 1997, which was largely offset by growing profits in the final two quarters as ERJ-145 deliveries began in earnest. Company sales almost doubled over the year, reaching $767 million.
Embraer's orderbook has swollen helped by American Eagle ERJ-145 orders
The financial results are in stark contrast to the position three years ago when Embraer was privatised. The company had lost $308 million in 1995, almost at the level of sales, and followed that with a $40 million loss in 1996. President Mauricio Botelho says that the company, now with a $3 billion order backlog, should show profits this year as it prepares for listings on international stock markets.
Source: Flight International
