by Ross Marowits, The Canadian Press Posted Sep 11, 2012 11:39 am MDT Discovery Air shares fall as Q2 profit cut in half due to acquisitions AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Discovery Air Inc. shares plummeted in Tuesday trading after the specialty aviation company’s growth initiatives weighed on its bottom line despite higher revenues.On the Toronto Stock Exchange, its shares fell nearly 11 per cent, losing 35 cents at $2.85 in morning trading.The Yellowknife-based company reported Tuesday that its second-quarter profit fell to $8.9 million or 38 cents per share on a diluted basis, down from $17.98 million or 96 cents per diluted share in the year-earlier period.Excluding a $300,000 gain from the May acquisition of Northern Air Support Ltd. (NAS), it earned $8.6 million, compared to $13.7 million in the same quarter last year.Discovery (TSX:DA.A), which primarily provides air transportation services to remote areas, said its profit fell due to the significant investments it has made to grow.Second-quarter revenue rose to $74.2 million from $70.6 million a year earlier. The increase was largely due to higher demand for services provided by its aviation segment, which posted a seven-per-cent increase in revenues to $68 million.Revenues and flight hours increased from resource-based customers, incremental revenue contributed by the acquisition of Helicopters.cl SpA and NAS, along with higher forest fire and medevac services.Helicopter charter company NAS was acquired in May for $9.4 million. It serves the western Canadian mining, forestry and oil and gas seismic sectors with bases in Kelowna, B.C., and Rocky Mountain House, Alta.Other revenues fell to $6.2 million from $7.4 million a year ago due to lower exploration camp and logistics activity as well as lower revenues from the maintenance, repair and overhaul activities.Despite the five-per-cent boost in overall revenues, the increase was short of Discovery’s expectations. It experienced lower than planned revenues from the airborne training services, an unexpected decline in mining exploration revenues in northern Canada, delays in obtaining regulatory approvals for new aircraft and longer lead times to generate customer orders for the new service offerings.“Our earnings declined despite strong revenue growth due largely to significant investments we made in a short period of time to position Discovery Air to capture long-term profitable growth opportunities,” stated Brian Semkowski, interim president and chief executive.Discovery acquired the two helicopter operations, put three commercial jets into service for a new charter operation and acquired seven aircraft so far this year. Its subsidiary Discovery Air Technical also acquired a portion of the airframe business from insolvent Aveos Fleet Performance.“The acquisition, certification and operating costs associated with these recent additions in a relatively short span of time caused our expenses to grow at a faster rate than our revenues,” he stated.“We are committed to generating strong returns from our investments and expect our earnings to improve as our technical services business matures and we increase the utilization of our newly acquired aircraft.”Semkowski was appointed interim president and CEO in June, replacing David Jennings who had held the post since 2008. Jennings remains a director of the company.The June 20 announcement came less than a week after Discovery reported that it had returned to the black in the first quarter of fiscal 2013, which also recorded a 42 per cent increase in revenue — rising to $52.9 million from $37.2 million.Discovery, with some 850 employees and more than 150 helicopters and fixed-wing aircraft, provides airborne training to the Canadian military as well as airborne fire services, air charter services and logistics support along with a range of maintenance, engineering and certification services.
The meeting, which will take place in Antalya from 27 to 30 November, will provide an opportunity to showcase share solutions, initiatives and success stories, as well as explore new avenues for collaboration and partnership. “It is about sharing with the spirit of solidarity and with the spirit of finding solutions to similar problems,” said Jorge Chediek, the Secretary-General’s Envoy on South-South Cooperation and Director of the UN Office for South-South Cooperation (UNOSSC).In an interview with UN News ahead of the Global South-South Development Expo 2017 (GSSD), Mr. Chediek added that South-South cooperation can contribute to the achievement of the SDGs through enhancing productive capacity, facilitating trade and investment, and sharing contextually-appropriate technologies. VIDEO:Jorge Chediek, the Secretary-General’s Envoy on South-South Cooperation, talks to UN News about the upcoming Global Expo that will take place in Antalya, Turkey, from 27 to 30 November.At the same time, he stressed that the SDGs require a global alliance with the engagement of all countries. “South-South should not be seen as a replacement but as a complement to North-South cooperation. It will be an important one because it can produce and it can generate more relevant experiences and more relevant practices for other developing countries.” More than 1,100 participants are expected at the Expo, which will feature over 50 exhibits highlighting cost-effective and replicable solutions to the challenges faced by developing countries. “We have representatives from over 120 countries that will participate in over 35 events and there will be the possibility of establishing lots of partnerships, as a demonstration of the importance South-South cooperation has in the context of the achievement of the Agenda 2030,” said Mr. Chediek.