CAE’s defence business takes impairment charge, expects Q4 loss
By The Canadian Press on May 22, 2024.
MONTREAL – CAE Inc. says it expects to report a loss attributable to equity holders of $504.7 million in its fourth quarter, due to one-time charges related to its defence business. Based on its preliminary results, the flight simulator company says it expects to post a loss of $1.58 per share for the quarter ended March 31 compared with a profit of $93.6 million or 29 cents per share a year earlier. CAE said its fourth quarter included a $568.0-million non-cash impairment of defence goodwill and $90.3 million in unfavourable defence contract profit adjustments. It also recorded a $35.7-million impairment of related technology and other non-financial assets, which are principally related to legacy contracts. Revenue for the quarter is expected to total $1.13 billion, according to the preliminary results, down from $1.20 billion a year earlier. On an adjusted basis, the company says it earned 12 cents per share in its latest quarter, down from 33 cents per share in the same quarter last year. CAE says it will provide more detail when it releases its full results on May 27 after financial markets close. “Because our defence performance has fallen well short of our expectations, we have taken measures to re-baseline the business, including a leadership reorganization and further targeted operational changes at the segment and corporate executive management levels,” CAE chief executive Marc Parent said in a statement. “The impairments and the accelerated risk recognition on the legacy contracts are a disappointing but necessary step to account for the programmatic risks we previously identified and provide a clearer path to margin improvement amid compelling secular trends for defence.” This report by The Canadian Press was first published May 22, 2024. Companies in this story: (TSX:CAE) 11-10
