Revenues grew slightly at Avcorp Industries (TSX: AVP) during 2014’s second quarter, while subsidiary Comtek posted a nearly 50% increase compared with the same period a year ago, according to financial reports released Friday (August 15).
The Delta-based airplane parts-maker, which has built 20 sets of outboard wings for Lockheed Martin’s F-35 fighter jet, posted revenues of $21.1 million in the second quarter. That’s a 4.8% increase from the same quarter in 2013.
But revenues at Ontario-based subsidiary Comtek, which makes composite parts for commercial planes, jumped 48% from 2.3 million during the second quarter of 2013 to $3.8 million in the most recent quarter.
Avcorp, however, recorded a net loss of $589,000 for the second quarter. It earned a quarterly profit of $1.6 million during the same period a year prior.
Comtek accounted for 11.5% of Avcorp’s total revenues in 2013’s Q2 but was responsible for 18.2% of its parent company’s revenues during the most recent quarter.
The company said revenues increased as a result of aircraft repairs, stronger composite parts sales and deliveries made for one of its defence programs.
But Avcorp is still awaiting word from the federal government about whether it would go forward with its order for 65 of the F-35s.
Ottawa originally estimated the cost of the F-35 program to be $9 billion but an auditor general report from 2012 revealed the cost was closer to $25 billion. The government then put its order on hold and has been re-evaluating it decision since.
Larry Glenesk, Avcorp’s vice-president of business development, told Business in Vancouver last week the company is concerned the decision could be delayed beyond this year.
He said there is the risk the F-35 order could become an election issue, delaying a decision even further and putting Avcorp’s contract renewal in jeopardy.
Canada was part of a consortium of 11 countries that ordered 3,100 of the fighter jets. As part of the deal, Lockheed Martin agreed to contract out only to companies based in countries that are part of the consortium.
If Ottawa decided not to go through with the order, Canadian companies like Avcorp would not get their contracts renewed.
