Business Context and Reporting Period
This Form 6-K filing by Embraer S.A. covers the month of December 2018, specifically reporting on a transaction finalized on December 19, 2018. The company is a global manufacturer of commercial and executive jets, defense, and security systems, headquartered in Brazil.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, cash flow, margins, debt, or liquidity metrics for the period. The only specific financial figure disclosed relates to a new contract:
- New Contract Value: USD 1.4 billion (based on current list prices).
- Backlog Impact: The contract value will be included in Embraer's 2018 fourth-quarter backlog.
Material Changes
The primary material event is the conversion of a Letter of Intent (LoI) announced at the Farnborough Airshow in July 2018 into a firm order. Embraer and Azul Linhas Aéreas Brasileiras S.A. signed a contract for 21 E195-E2 jets. This increases Azul's total order for Embraer E2 aircraft to 51 units (combining this order with 30 jets ordered in 2015).
Outlook and Management Commentary
Management highlights that Azul is the launch operator for the E195-E2 and is scheduled to receive the first aircraft in 2019. The filing reiterates Embraer's market position as the world's leading manufacturer of commercial jets with up to 150 seats, noting nearly 1,800 orders and 1,500 deliveries for the E-Jets program alone.
Investor Verification Checklist
- Verify the timing of revenue recognition for the USD 1.4 billion contract, as it is currently booked as backlog.
- Confirm the delivery schedule for the 21 E195-E2 jets, with the first expected in 2019.
- Review the full 2018 fourth-quarter financial results to see the total impact of this order on the quarterly backlog figure.
- Assess Azul's financial health and ability to fulfill the expanded order of 51 E2 aircraft.