Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CTT Systems AB (LTS:0GUO, Financial) received its first order for an ACJ330neo kit system, marking progress in the VIP sector.
- The company signed an MOU with Liebherr Aerospace to offer humidification systems for Bombardier's Global 7500/8000, advancing in the business jet market.
- There is a resurgence in the anti-condensation business, with potential retrofit orders for over 500 aircraft.
- Despite a decrease in net sales, OEM sales increased by $5 million, indicating strong demand in that segment.
- CTT Systems AB maintains a strong financial position with a net cash status and an equity ratio of 73%.
Negative Points
- Net sales decreased by 22% year-on-year, primarily due to pushed orders and transitory destocking in the aftermarket.
- Operating profit (EBIT) decreased by 51% year-on-year, reflecting a significant drop in profitability.
- Aftermarket sales dropped by SEK13 million, and private jet sales declined by 87%, impacting overall revenue.
- The order backlog decreased by SEK32 million to SEK47 million, indicating a low level of future orders.
- The company faces competition in the aftermarket, with some airlines switching to competitors due to pricing.
Q & A Highlights
Q: Can you clarify the impact of Boeing's production pause on your deliveries and when you expect to resume normal operations?
A: We will restart deliveries to Boeing's 787 program in the first quarter of next year, as we already have those orders in place. There is no expected lag in resuming deliveries.
Q: How is the situation with Airbus regarding supply chain issues and matching build rates?
A: The destocking effect for the A350 ended in Q2, and we had good deliveries in Q3, which will continue into Q4 and Q1.
Q: What kind of customers are showing interest in your anti-condensation systems, and what is the potential for scaling up?
A: Major European low-cost carriers like Jet2 and Transavia are interested, especially as they transition their fleets. We are also in discussions with a major low-cost carrier for retrofitting aircraft.
Q: Has there been any change in the competitive landscape for your aftermarket products?
A: We have not seen any impact from competitive threats on our Q3 results. The decline was due to destocking effects, not competition.
Q: Can you provide an update on your progress with Bombardier and other potential partnerships in the private jet market?
A: We are making progress with Bombardier, finalizing our offer with Liebherr. We are also in discussions with other manufacturers to replicate the ACJ concept for larger VIP jets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
