I am reading the annual report from United Technologies - which owns, amongst other things, a helicopter company. To quote:
On the commercial side, Sikorsky finished the year with a backlog of nearly $3 billion — its largest ever — driven by growing demand for offshore transportation in the oil and gas industry.
I am not sure how good that backlog is.
John
Disclosure: no positions. Primarily reading because we have a disclosed position in a jet engine company (Rolls Royce) and like the follow the competition (Pratt and Whitney).
PS. I have received at least half a dozen emails about the hostage drama in Sydney. It is 5km away and I know no more than you can find out from internet. We can see the city from our office though and the number of helicopters swarming around has reduced.
6 comments:
Helicopter industry figures compared for 2013
Written by ADIT - The Bulletin, Monday, 7 April 2014
Finmeccanica recently released its financial results for 2013 allowing us now to review and compare the global helicopter industry’s figures for the period.
From a revenue point of view, it appears that
Airbus Helicopters still has the lead with revenue of $8.670 million (up 0.5% from last year),
followed by
Sikorsky Aircraft, with a 2013 revenue of $6.253 million (down 6.5%),
AgustaWestland, getting closer to the second seed with$5.612 million (down 3.9%, but mainly because of the reduction of around $415 million in revenue coming from the cancellation of the Indian VIP helicopters contract) and
Bell Helicopter, with revenue of $4 511 million (up 5.5% from 2012).
On the operating margin side, the situation is the complete opposite.
Bell Helicopter, despite a reduction of 2.3pts still is the number one in this field with an operating margin of 12.7%,
followed by AgustaWestland at 11.4% (up from 10.85% one year ago),
Sikorsky Aircraft, for the first time in years below 10% with 9.5% (from 10.5%),
and, Airbus Helicopters, still fourth (as is has been the case for quite a long time now), with 6.4% (and down –before on off- from 6.9% one year ago).
Regarding deliveries, Airbus Helicopters remains second in numbers behind
Robinson Helicopter, but first in our rating (as in their own one as they only count helicopters above 1.3 tons), with 497 helicopters delivered in 2013 (up from 475).
Number 2 in number of deliveries appears to be Bell Helicopter with 279 helicopters (up 11%), and split between 213 commercial aircraft (up from 188) and 66 military platforms (up from 63). The Texas based helicopter maker is followed by
Sikorsky Aircraft with 240 units delivered in 2013, in line with 2012, but with different situation in military and commercial deliveries. While commercial deliveries were up to 63 from 34, military ones were down to 177 from 202, actually explaining the 16.6% drop of the company in operating profit.
At last, AgustaWestland delivered a total of 230 helicopters, but as the AW139 represents a pretty fair proportion of the total, this number is compensated by the value of assets sold.
Orders and backlogs also reveal very different situations among OEMs.
Two of the saw their backlogs increase (AgustaWestland and Sikorsky Aircraft) while two others saw them decrease (Airbus Helicopters and Bell Helicopter).
AgustaWestland recorded orders in 2013 worth $6 036 million (up 9% from 2012), allowing the backlog to reach $16 422 million, representing 2.93 years of revenue. Yet, one has to underline that it benefited from a big boost in Q4, mainly coming the Norwegian orders for 16 AW101 SAR helicopters, worth $1.6 billion, allowing sales to be up 23.3% for that specific period. Orders in Q4 thus represented 49% of the total orders for 2013.
Airbus Helicopters recorded orders worth $7 950 million, up from $7 400 million in 2012, which is pretty good given the difficult year that the company faced on various grounds (EC175 delays, EC225 grounded…). This allows Airbus Helicopters to have a pretty heavy backlog worth $17 100 million, representing 2.15 years of production, although down 4% from last year.
Sikorsky, while not communicating on the value of orders received, indicated that the total backlog now reaches $14 900 million, up from $14 400 million at the end of 2012, leading to think that the book to bill is fairly above one. Sikorsky’s backlog represents 2.38 years of production. Just like Sikorsky,
Bell Helicopter is not communicating on orders over the period.
But having a look at the backlog evolution, it appears that the company’s backlog felt 14% or $1 billion between the end of 2012 and the end of 2013, now reaching $6 500 million, far behind the three other companies, as the backlog only represents 1.44 years of production. Among the $1bn reduction, $400 million is coming from V-22 reduction.
How do you feel about the backlog for RR's marine segment?
The correlation between demand for helicopters and oil prices is shockingly high. But then, the E&P sector account for the bulk of helicopter usage....
Surely those $3 bn is helicopter money?
Take a look at the biggest E&P helicopter user HELI.
~50% of Sikorsky's backlog is spoken for by Milestone Avaiation Group, which was recently purchased by GE Capital for $1.8B. MAG leases helicopters to helicopter service companies. Bristow Group (BRS) is the largest. CHC Helicopters (HELI) is a smaller (and much less profitable) competitor.
There other private lessors out there, such as Waypoint and LCI.
So, I would be looking more at BRS and HELI (and maybe GE) than UTX.
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