Embraer posts healthy sales but warns of strained defence budgets
Embraer reported Q2 2021 net revenues of $174.9 million in its Defense & Security segment, more than double the $85.8 million posted in Q2 2020 and accounting for 15.5% of total group sales.
Assembly work continued in Q2 on the KC-390 Millennium production line, including five units for the Brazilian Air Force (FAB) and one for the Portuguese Air Force.
Four KC-390 Millennium transport aircraft have already been delivered to the FAB and are performing ‘a variety of logistics missions’ including COVID-19 response, Embraer announced on 13 August.
Since the end of Q2, the company has also conducted unpaved runway tests of the aircraft.
A pair of A-29 Super Tucano aircraft for the Nigerian Air Force was delivered to Sierra Nevada Corporation in Q2, while two other A-29s were delivered to an undisclosed customer.
A maintenance contract with the Chilean Air Force was also renewed.
Group-wide revenues Q2 reached $1.13 billion, representing year-on-year growth of 110.4% with double-digit growth in all segments. Revenues in H1 2021 revenues grew by 65.5% compared to the same period in 2020.
While the Defense & Security segment did not experience the immediate impact of the COVID-19 pandemic, ‘there are signs that budgets of some important customers have become strained following spending to fight the pandemic and its economic impacts’, Embraer noted.
However, the Brazilian conglomerate remains confident that demand for its defence products will improve worldwide.
More from Defence Notes
-
How UAE defence giant EDGE Group plans to double its exports
The UAE defence conglomerate has put an aggressive strategy in place to increase its share of exports while navigating the growing gap between East and West.
-
US lawmakers warn that “more military spending is absolutely necessary” to ensure Pentagon’s readiness
The US Congress has raised concerns about how inflation rates and cuts in main acquisition programmes could affect the US military.
-
Can the US overcome Russian and Chinese nuclear capabilities?
Washington’s ageing inventory and the pace Moscow and Beijing have been modernising their capabilities put in check the US Nuclear deterrence.
-
US FY2024 funding package passes as China closes military capability gap
The Pentagon has been operating under temporary funding since October 2023, which has impacted its main acquisition and development programmes, increasing the capability gap between the US and China.
-
NATO outlines future challenges as Ukrainian funding from US stalls
In 2023, defence spending increased by an unprecedented 11% across European NATO countries and Canada. Since 2014, the group has spent an additional US$600 billion on defence.