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Embraer hopes to announce new product partnership soon, says CEO

Published 03/19/2021, 09:27 AM
Updated 03/19/2021, 12:40 PM
© Reuters. FILE PHOTO: FILE PHOTO: The logo of Brazilian planemaker Embraer SA is seen at the company's headquarters in Sao Jose dos Campos
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By Marcelo Rochabrun

SAO PAULO (Reuters) - Brazil planemaker Embraer is actively working on new product development partnerships and hopes to announce something soon, CEO Francisco Gomes Neto said on Friday in a call with reporters.

While Gomes Neto did not specify which new products are involved in the discussions, he has said in the past that the company hopes to develop a new turboprop plane but that it cannot do it alone.

Reuters first reported last year that China, India and Russia were considering partnering with Embraer.

Until last year, Embraer was set to sell the majority of its commercial aviation operation to Boeing (NYSE:BA) Co for $4.2 billion. But that deal fell apart in April, weighed down by the pandemic's crippling effect on travel and planemakers.

On Friday, Embraer reported its best quarter so far during the COVID-19 pandemic, narrowing losses to just $3 million while delivering more jets in the period than in the first nine months of the year combined.

But it remains unclear if the worst has passed for Embraer or if more challenges lie ahead, because so much of the company's 2021 sales happened in the last three months of the year. The fourth quarter already tended to be Embraer's strongest before the pandemic.

The world's No. 3 planemaker will not issue forward-looking guidance because it says its outlook remains uncertain, but noted that it had had no commercial jet orders canceled and that it had finished downsizing its workforce.

Overall in 2020, Embraer lost $732 million, more than double its loss for 2019, weighed down by its commercial aviation unit, which is also its main business line.

Deliveries fell by half from 2019. While the planemaker delivered 28 commercial jets in the fourth quarter, it only delivered 16 in the previous 9 months.

© Reuters. FILE PHOTO: FILE PHOTO: The logo of Brazilian planemaker Embraer SA is seen at the company's headquarters in Sao Jose dos Campos

The result was that Embraer's fourth-quarter revenue came in at $1.8 billion, just 12% lower than a year earlier, even though full-year revenue was down 31%.

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