May 21, 2022

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Embraer (EMBR3) takes delivery of 14 aircraft in the first quarter, with a backlog of US$17.3 billion;  Stocks closed 3.92% higher.

Embraer (EMBR3) takes delivery of 14 aircraft in the first quarter, with a backlog of US$17.3 billion; Stocks closed 3.92% higher.

Embraer Aircraft Corporation (EMBR3On Tuesday (19) it said it delivered 14 aircraft in the first quarter of 2022, including six commercial aircraft and eight executives, and that the backlog of orders totaled $17.3 billion as of March 31.

Shares had a positive day this Tuesday (19), closing 3.92% higher at R$14.05.

Embraer said it delivered 56 Phenom 300 aircraft last year. This series has averaged 50 aircraft deliveries per year since entering the market in December 2009. In the first quarter of 2022, Executive Aviation sales are following a rhythm of growth.

In the defense department, Embraer highlighted two contracts with the Brazilian Army, the first for the Army to acquire four additional SABER M60 radar units, in its 2.0 version, and the second for the development and implementation of the second phase of the Army’s strategy. Integrated System for Border Control (SISFRON) software.

In the services and support sector, Embraer highlighted the signing of a long-term service agreement with Air Peace to support the company’s fleet of E195-E2 and ERJ 145 aircraft. The contract includes access to the Pool Program, which includes component exchange and repair services for hundreds of items on the Embraer’s aircraft. For Air Peace, the installation of Ahead-Pro (Aircraft Health Analysis and Diagnostics – PROgnosis) in the company’s E195 -E2 fleet. In addition, Embraer has signed a long-term contract extension for the pool program with German Airlines.

Bradesco BBI highlights that despite first-quarter 22 deliveries that fell short of its estimates, it expects Embraer to meet its 2022 guidance of 60-70 commercial and 100-110 executive jets for this year, given that : These deliveries are less than – the expected decline in aircraft can be partially explained by the 20-day shutdown in January 2022 to bring back the commercial aviation division.

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BBI maintains an outperformance (above market average) rating for the company’s ADR (ERJ).

The ITaú BBA Index highlighted that the data for the first quarter of ’22 was weak, but within expectations. “Weak overall numbers even considering the impact of seasonality, but with a strong order book,” he thinks of the analysis. “Deliveries were in line with our expectations, and despite a poor start to the year, we believe Embraer is likely to meet its guidance for 2022.”

To reach its target for the year, Embraer must deliver 54-64 commercial jets in April-December (which means 38%-64% year-over-year growth) and 92-102 executive jets in the same period (+15% – 28% in same comparison). The BBA also maintains superior ratings for the ADR (ERJ).

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