'Geopolitical tensions' mean more business for Heroux-Devtek, as defence needs rise

Christopher Reynolds, The Canadian Press

Global strife has boosted demand for Héroux-Devtek Inc. wares, with the continued rebound in commercial travel adding to its record sales last quarter, said CEO Martin Brassard.

"The aerospace industry outlook remains very strong. Global passenger traffic is back to pre-pandemic levels," he told analysts on a conference call Wednesday. The International Air Transport Association predicts further growth, the head of the aircraft landing gear maker noted.

"On the defence side, geopolitical tensions have added urgency to the defense industry's effort to maintain, develop and launch new aircraft programs and we are very active on the number of defence platforms."

Defence sales rose slightly from last year to $108.2 million in the company's fourth quarter. The company carried out maintenance and deliveries on the Sikorsky CH-53K King Stallion helicopter — a heavy transport chopper used by the U.S. Marine Corps — and Lockheed Martin F-35 fighter jets, deployed by more than a half-dozen militaries.

On the civil aviation side, sales jumped 55 per cent year over year to $75.8 million in the quarter ended March 31, pushed up by deliveries of Boeing 777 jetliners and Embraer Praetor and E2 planes.

In an interview Tuesday, Brassard said he was unconcerned about delays in Boeing Co. production after a door plug blowout on a 737 Max 9 aircraft during an Alaska Airlines flight in January sparked an investigation by U.S. regulators.

"Right now we're ramping up. The 777 is going well," the chief executive said, adding that he hopes to see the Boeing's 777x wide-body jet enter into service next year or early 2026.

Héroux-Devtek reported a fourth-quarter profit of $20.7 million, up from $6.3 million a year earlier, as its sales rose 18 per cent.

Sales in the three-month period shot up 18 per cent year over year to a record $184.1 million, said the Montreal-area-based company.

On an adjusted basis, Héroux-Devtek earned 49 cents per share in its latest quarter, up more than 170 per cent from an adjusted profit of 18 cents per share in the same quarter last year and blowing past analysts' expectations of 31 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published May 22, 2024.