Stockwatch – CAE Agrees Civil Aviation Training Contracts Worth $200m

Stockwatch – CAE, Inc. (TSE:CAE, Mkt cap 3.71B, P/E 19.59, Div/yield 0.07/1.99, EPS 0.72, Shares 264.66M)has announced it has sealed a series of civil aviation training solutions contracts totaling more than $200 million with airlines and aircraft operators in the Americas, Asia, Africa and the Middle East.

Stockwatch CAE contracts totalling $200m airlines Americas Asia Africa Middle East

Stockwatch – CAE announced contracts totalling more than $200m with airlines in the Americas, Asia, Africa and the Middle East.

The Montreal-based company offers training and simulators for the civil aviation, defence and healthcare industries. The Financial Post says it has relied heavily on its civil unit for growth in recent times, with the entirety of CAE’s operating growth in its fiscal first quarter coming from that business.

Solid growth in the Middle East and the rise of low-cost carriers in Asia saw global airline passenger traffic grow by roughly 6% in the first half of 2014. The demand for flight simulators has also been boosted by the fact that a number of U.S. airlines are currently replacing their fleets.

Nick Leontidis, CAE’s group president for the civil aviation business, said in an interview that he expects this type of demand to continue for some time.

“There is a large order book of aircraft being delivered by Boeing and Airbus, and with that comes increased demand for training,” he added.

Leontidis said the orders, alongside the recently announced joint venture with Japan Airlines, show “major progress” in applying its strategy to deliver “comprehensive and highly differentiated solutions” to its customers.

The latest batch of contracts include the expansion of a long-term training agreement with an airline group in the Americas, as well as long-term agreement to train 200 new pilot cadets for Air Algérie.

Stockwatch – CAE’s net income grew by 3.78%, year over year, to $0.17 per share during the 1st quarter of its 2015 fiscal year, as reported on August 13 of 2014. This was among the strongest growth seen by any company in this industry.

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