Newspaper article The Canadian Press

HNZ Global Helicopter Group Adjusts to Pullout of U.S. Military from Afghanistan

Newspaper article The Canadian Press

HNZ Global Helicopter Group Adjusts to Pullout of U.S. Military from Afghanistan

Article excerpt

HNZ Global adjusts to post-Afghanistan era

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MONTREAL - HNZ Group Inc. says the phased conclusion of military contracts in Afghanistan and reduced activity in the Western Canada resource sector pulled down third-quarter revenue by $18.8 million compared with the same time last year -- a decline of 22 per cent.

The Montreal-based company -- which supplies helicopter services to private-sector and government clients around the world -- had $58.1 million of revenue in the three months ended Sept. 30, down from $74.9 million in the third quarter of 2013.

HNZ (TSX:HNZ.A) has recently been operating a reduced fleet of three helicopters in Afghanistan for the United States military effort, which has been winding down.

The USTRANSCOM contract generated about $6 million of revenue in the third quarter ended Sept. 30 but it ended a month later, as scheduled, on Oct. 31.

The company -- which primarily supplies helicopters and flight crews to resource industries -- says it plans to move two of the three remaining Sikorsky S61 heavy lift helicopters from Afghanistan to Canada and the third to another location in Asia. Most of those costs will be covered under terms of the USTRANSCOM contract.

HNZ president and CEO Don Wall said that U.S.-led military interventions against Islamic State forces in the Mideast may provide an opportunity but it's too soon to tell.

"Obviously we would like to support those activities but today we don't see anything on that activity front," Wall told analysts in a conference call.

HNZ currently operates more than 120 helicopters in Canada, Australia, New Zealand, Antarctica and Southeast Asia for multinational corporations and government agencies. The aircraft are used mainly to transport personnel and cargo to remote areas, fight forest fires and support exploratory, production and construction work.

HNZ executives said that there was less work from pipeline companies in Western Canada in this year's third quarter than in the comparable period last year, accounting for some of the revenue decline. But that was somewhat offset by strong demand for fire-related work, which tends to have higher margins than contracted jobs. …

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