HOUSTON and ROME - Bristow Group Inc. (NYSE: VTOL), a global provider of vertical flight solutions, and Leonardo, an aerospace, defense, and security company, have announced the finalization of long-term agreements that will extend into the next decade, enhancing support and training for the AW139 and AW189 helicopter fleets. The agreements aim to bolster Bristow's operational capabilities and meet increasing contractual demands, especially in offshore energy services (OES) and search and rescue (SAR) operations.
These strategic agreements include enhanced Power-by-the-Hour (PBH) maintenance arrangements, ensuring operational efficiency for Bristow's global fleet. In addition to the maintenance support, the package features a long-term AW189 simulator training agreement in Aberdeen, Scotland, to fulfill critical pilot training requirements. Further strengthening training capabilities, an AW139 full flight simulator will be introduced in Aberdeen starting in 2026, complementing the existing AW189 simulator and supporting North Sea fleet operations.
Bristow will also introduce four new AW189 helicopters into its OES business, with the new aircraft scheduled to enter service in 2025 and 2026. These helicopters are part of an order announced earlier this year and are expected to provide Bristow with additional flexibility and diversification in its fleet planning.
Stu Stavley, Bristow's Chief Operating Officer for Offshore Energy Services, stated that the finalized agreements are aligned with the company's strategic objectives and will support Bristow's ability to meet evolving service requirements. Paul De Jonge van Ellemeet, SVP Commercial Market Development & Global Accounts at Leonardo, emphasized Leonardo's commitment to offering full component coverage service plans and access to advanced simulators, ensuring Bristow's continued high-level operations.
The collaboration between Bristow and Leonardo is set against the backdrop of forward-looking statements that involve risks and uncertainties, including supply chain disruptions, reliance on a limited number of manufacturers and customers, and the potential impact of global economic conditions on the demand for oil and gas services.
This news is based on a press release statement and reflects the companies' expectations for future fleet support and training enhancements.
"In other recent news, Deutsche Bank (ETR:DBKGn) has reiterated its buy rating on Leonardo Spa, with an increased stock price target from €26.00 to €27.00. The bank's analysts anticipate Leonardo's third-quarter results, scheduled for release soon, to display a robust order intake despite a predicted year-over-year decline. The third-quarter operational performance is projected to align closely with the same quarter of the previous year at the EBITA level. A cash outflow of €100 million is expected for the third quarter of 2024.
In terms of specifics, Deutsche Bank's detailed forecasts for Leonardo's third-quarter performance include a 15% decrease in order intake, a 12% increase in sales (or 6% excluding the Space sector), and a 1% rise in group EBITA. The order intake for the quarter is expected to be mainly comprised of small- to medium-sized contracts, with a predicted value of €3.9 billion, marking a 15% decrease compared to the same period last year.
Previously, Deutsche Bank also projected Leonardo's first-half results to demonstrate a 21% increase in order intake, a 6% rise in sales, and a 2% decrease in EBIT. This was based on the timing of certain projects and the increased valuation of DRS and Hensoldt. Despite a forecasted softer performance in the second quarter compared to the first, Deutsche Bank's key focus remains on order intake. These are the recent developments in Leonardo Spa's financial performance as per Deutsche Bank's analysis."
InvestingPro Insights
Bristow Group's strategic agreements with Leonardo align well with its strong market position and financial performance. According to InvestingPro data, Bristow Group (NYSE: VTOL) boasts a market capitalization of $14.42 billion, reflecting its significant presence in the aerospace and defense industry. The company's P/E ratio of 13.52 suggests it may be undervalued relative to its earnings potential, which is particularly relevant given its recent fleet expansion plans.
InvestingPro Tips highlight that Bristow Group is a "prominent player in the Aerospace & Defense industry" and has shown a "high return over the last year." These factors underscore the company's strategic moves to enhance its operational capabilities through the Leonardo agreements. The company's strong performance is further evidenced by its impressive year-to-date price total return of 51.36% and a one-year price total return of 62.67%.
Moreover, Bristow Group's decision to invest in new AW189 helicopters and advanced training simulators is supported by its solid financial footing. The InvestingPro Tip noting that the company "operates with a moderate level of debt" suggests it has the financial flexibility to make such long-term investments without overextending itself.
For investors seeking more comprehensive insights, InvestingPro offers 7 additional tips for Bristow Group, providing a deeper understanding of the company's financial health and market position.
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