Canadian Helicopters Reports Second Quarter Results

SECOND-QUARTER RESULTS

Revenue reached $41.6 million, an increase of 6.1%, or $2.4 million, over revenue of $39.2 million a year ago. Instrument Flight Rules (IFR) revenue increased by $2.2 million, Ancillary revenue including the CFTS contract grew $0.4 million, while Visual Flight Rules (VFR) revenue decreased by $0.2 million. Revenue growth denotes firmer pricing and a service mix generating higher hourly rates resulting primarily from the addition of a new IFR aircraft to service Oil and Gas activities. Slightly lower VFR revenue was due to less utility and resource work in certain areas as well as reduced fire suppression activities because of cool and wet weather during the quarter.

Revenue-earning flying hours for the three-month period were down 6.2% to 21,038 hours. Strong activity in the mining sector primarily in eastern and northern Canada was offset by fewer hours flown by light aircraft in western Canada. Reduced resource and utility work in certain areas and lower fire suppression activities also contributed to the reduction.

EBITDA amounted to $9.1 million, down from $10.8 million a year earlier, a decline essentially due to increased crew costs, including wages and training related to the new IFR aircraft. This new aircraft also increased the Fund's operating lease expenses. Net earnings before non-controlling interest were $6.7 million, or $0.50 per unit, down from $8.5 million, or $0.64 per unit, a year ago.

"Demand for our services remains solid, which is a testimony to the strength of our business model," said Jean-Pierre Blais, President of Canadian Helicopters Income Fund. "In spite of volatile economic environment, the Fund generated strong revenue performance and strong cash flow. Second quarter results were impacted by increased crew costs, a reality affecting the entire industry."

During the quarter, cash flows from operating activities before net change in non-cash working capital balances reached $9.4 million compared with $10.6 million a year earlier. The Fund generated distributable cash of $11.5 million, or $0.87 per unit, an increase of 13.2% over distributable cash of $10.2 million, or $0.76 per unit, last year. This improvement is explained by proceeds from disposal of property, plant and equipment in excess of additions to such assets. As of June 30, 2008, the Fund's balance sheet remains strong with total debt of $14.9 million, down from $21.0 million twelve months earlier. -- www.cnxmarketlink.com