SAO PAULO, April 30 (Reuters) - Brazilian aircraft maker Embraer (EMBR3.SA)(ERJ.N) said late on Wednesday its first-quarter profit sank 75 percent because of a surge in tax expenses and the cost to fire part of its workforce.
Net income plunged to 38.25 million reais ($17.6 million) in the quarter from 152.05 million reais in the year-earlier period, Embraer said in a statement.
Sales grew 15 percent to 2.67 billion reais as a weaker Brazilian currency increased export revenue despite a decline in aircraft deliveries to 40 from 45 in the year-earlier period.
Embraer had already revised its 2009 forecasts for sales and airplane deliveries as a slump in major economies has curtailed demand for air travel. The company said two weeks ago its firm order backlog had dwindled as the economic downturn prompted some cancellations, slipping to $19.7 billion in March from $20.9 billion at the end of 2008.
“Due to the severe worldwide economic downturn since September 2008, Embraer recorded cancellations of some of the firm orders of its executive aviation backlog as well as deferrals of deliveries scheduled for the commercial aviation segment,” the company said in the statement.
Earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as EBITDA, fell to 209.6 million reais from 227.7 million reais in the first quarter of 2008.
Embraer, short for Empresa Brasileira de Aeronautica, said operating expenses jumped 17.7 percent to 346.8 million reais, mainly because of one-time costs to fire about 4,000 workers, or 20 percent of its workforce.
The company also had 64.8 million reais in income tax expenses, compared with 4.8 million reais a year earlier.
Embraer is the world’s leading manufacturer of regional jets seating up to 120 passengers. It also makes business jets and military aircraft.
Its main rival in the regional jet market is Canada’s Bombardier Inc (BBDb.TO). ($1=2.171 reais) (Reporting by Elzio Barreto, editing by Gerald E. McCormick)