CAE management remains optimistic about the performance of its defense division in the coming months after it went through some turbulence.
The boss of the flight simulator manufacturer, Marc Parent, admitted Tuesday that defense activities had not met his expectations in terms of profitability until now.
But the Montreal company’s strategy “remains solid,” he said during a conference call with analysts on the financial results for the fourth quarter and the 2024 fiscal year.
As proof, the adjusted order backlog for defense has grown by 20% over the last two years, noted the President and CEO.
The sector is entering a growing market with the increase in military budgets of NATO countries in a context of geopolitical tensions, said Mr. Parent.
CAE’s defense operations generated revenues of $425.5 million in the fourth quarter of 2024, down 21% from the same period last year.
The division also recorded a negative operating result of 680 million, compared to a positive result of 29 million a year earlier.
These figures reflect what was previously announced by the company regarding eight former fixed-price military contracts signed before the pandemic. They have eaten into its margins in an inflationary context.
CAE warned last week in preliminary results that it would post a non-cash loss of 568.0 million in the fourth quarter for its defense activities.
In the process, the company announced a senior management restructuring and the appointment of Nick Leontidis to a new role as chief operating officer.
In terms of civilian activities, the picture is rosier. CAE reported revenues of 700 million for this division in the fourth quarter, up 6% compared to the same date in 2023. Operating income stood at 147 million, compared to 149.3 million a year earlier.