Sukhoi Civil Aircraft reports 2008 financial results
Sukhoi Civil Aircraft Company (SCAC) has released its audited consolidated financial results for 2008 according to international accounting standards. The audit of the report was conducted by KPMG.
The main financial indicators for 2008 showed revenue increased by 9.5 times and totalled $5.956 million. The company's operational loss reached $44.783 million, compared with a profit of $2.7 million in 2007, with the net loss for 2008 amounting to $114.713 million, compared with the net income of $3.622 million a year earlier.
Total assets for the year rose by 27.3% and reached $859.826 million and net financial debt for the year rose by 66% to $784.787 million.
The reduction of the government grants in 2008 compared with 2007, as well as the weakening of the ruble against the US dollar and the euro in the period from August to December of last year (by 25.3% and 13.4%, accordingly) provided the main impact on the company’s results in the reported period.
The company reports a significant reduction of commercial expenditure in 2008, enabling it to keep operational costs at the 2007 level (operational costs rose by just 1%). But the reduction of the governmental grants from $66.6 million in 2007 to $16.7 million in 2008 negatively impacted operational profit, which led to that operational loss of $44.783 million.
“When looking at this financial report one should consider a fact that SCAC’s revenue for now reflects only the cost of the company’s completed research and development projects, since we are an executor of the Russian Federation’s federal programme for development of civil aviation regarding the creation of the family of regional aircraft," explained Maxim Grishanin, SCAC’s senior vice-president for economy and finance. "Excluding the exchange losses in the second half of 2008 (which were caused by the devaluation of the ruble, a factor the company can’t influence), SCAC’s financial results correspond to the current investment stage of development, during which we are beginning mass production of the aircraft and are completing the certification of our product. The indicators of the report will become more revealing when they include revenue from the main business activity, which is aircraft sales.
"An important and positive factor for the company is the readiness of the country’s government to support such a significant Russia civil aircraft project at a time of sharply changed macroeconomic conditions," Grishanin added. "This is supported by the Russian government’s decision to increase state funding for SSJ100 project by 3.6 billion rubles for financing of engineering efforts as part of the federal programme, as well as 3.2 billion rubles to increase charter capital of the Sukhoi Holding Company for financing the SSJ100 project. Closing of the deal with our strategic partner Alenia Aeronautica in 2009 (the acquisition by Alenia of 25% +1 share in SCAC) will increase the capital of SCAC. Active state support of the Russian Federation and partnership with Alenia Aeronautica will make it possible to start aircraft supplies to clients according to the schedule.”