CHC Group Ltd. (NYSE:HELI), the parent company of CHC Helicopter, held its Q4 2014 earnings conference call on July 10, 2014. Here is the full transcript (Edited) of the event…
On behalf of CHC Helicopter, hello and welcome to the company’s fiscal 2014 fourth quarter earnings presentation. My name is Jessie and I will be your event manager today.
Before we get started, I’d like to mention that today’s event is being recorded and you are currently in a listen-only mode. I’d like to acquaint you with some of the ways that you can participate during the event. As a reminder, to view the slides you can either join the webcast portion or download the slide presentation at the investor relations website at chc.ca/presentation. We will have a question-and-answer session at the end of today’s presentation. (Operator Instructions)
Now I’d like to turn today’s program over to Lynn Tyson, VP Investor Relations.
Lynn Tyson – VP, Investor Relations
Thank you, Jessie. Good morning. I’d like to remind everyone that today’s discussion contains forward-looking statements based on the environment as we see it today and as such are subject to known and unknown risks and uncertainties. Our actual results might differ materially from those projected in those forward-looking statements. Please refer to our press release or page three of our earnings presentations and to our reports filed with the SEC for more information on specific risk factors that could cause actual results to differ.
Note that we are using certain non-GAAP financial measures in the presentation and on this call. The appropriate GAAP financial reconciliations are included in our earnings release and at the end of our earnings presentation, both of which are posted on our website. Note that all references to consolidated EBITDAR and margin on an adjusted basis, excluding the impact of special items and unless noted otherwise all growth rates refer to year-over-year progress.
On the call today we have Bill Amelio, our President and CEO; and Joan Hooper, our CFO. Bill will start with an update on our performance and overview of guidance and Joan will follow with a more detailed discussion on our fiscal 2014 results and fiscal 2015 guidance and long-term targets. After that we will open the call for questions and then Bill will close with some final comments.
With that, I’ll now turn the call over to Bill.
Bill Amelio – President and CEO
Thanks, Lynn. We have a lot of ground to cover today. We welcomed the chance to expand on our financial priorities we’ve outlined during our IPO in January and again in March during our third quarter earnings call. Also, Joan and I will provide guidance for CHC’s fiscal 2015 as well as longer-term financial targets.
However first, I want to talk about safety, which is the essential element of all that we do at CHC. The rolling five-year accident rate is a principal measure of safety performance in the offshore helicopter service industry. Through the last quarter, CHC’s 0.38 accidents per 100,000 flight hours were well again below the average rates for all twin helicopters as well as offshore and rotary wing operators.
Please turn to Page 5. Last September, CHC and other major offshore helicopter operators took a fresh approach to achieving even higher levels of global offshore helicopter safety. We formed a joint operating review or JOR, in partnership with leading helicopter manufacturers around the world.
The JOR is focusing on five areas: First, standardizing the requirements of oil and gas customers wherever possible; second, sharing safety information rapidly and regularly between operators and manufacturers; three, enhancing the monitoring of pilot performance and effectiveness of crew resource management; four, giving operators, including pilots a more direct voice in the design of aircraft systems; and five, refining the use of stabilized approaches in rotary wing flight.
We’re also making great progress in several areas. In the process we’re relying even on broader industry-wide attention to helicopter safety, specifically for refining the scope and objectives of what had been called European Helicopter Organization or EHA to take on the mission of raising safety around the world, everywhere helicopters fly.
Consistent with its name the New Heli Offshore is focused on offshore flights. Although its membership is open to any organization that is committed to help constantly raise helicopter safety.
Please turn to Page 6. Providing safe world-class service and accommodating expected long-term growth requires the right facilities. In May, we started operating from a larger hanger for our existing flying operations in Cabo Frio, Brazil, one of our three bases that we have in the country.
Cabo Frio is located in the Campos Basin which accounts for about 80% of Brazil’s oil production. With the new hanger there we will further improve and streamline customer and passenger services, will enhance maintenance operations and ensure that we have enough capacity for long-term growth in Brazil.
In early June, we formally opened a 65,000 square foot MRO hanger in Rzeszow, Poland where we had been operating previously in a temporary facility since February 2013. The new MRO hanger equips us to address current and anticipated needs of MRO customers with high quality, high efficiency and high value, especially customers that fly large capacity long-range heavy helicopters.
Before you hear from Joan, I want to provide my own perspective on fiscal 2014 and guidance about where CHC is heading.
Overall I am pleased with the direction coming out of our fiscal 2014. Our full year results were consistent with our March guidance to you with revenues up 1% and EBITDAR down 3%. This performance was in the midst of the largest industry-wide suspension of commercial helicopters, EC225. It began in October 2012 and continued until they were returned to service during the second half of calendar 2013. As you know, CHC has the world’s largest fleet of EC225s. So the suspension was a major disruption to our business and our customers.