Helicopters Income Fund distribution should be maintained despite lost contract hit

admin — Thu, 24 Sep 2009 17:36:08 +0000

CHL announced that a competitor has been awarded one of the three
contracts with the USAF pertaining to the North Warning System radar
sites. The contract had previously been serviced by CHL for over 19 years
and represented $10.3MM revenue on a trailing 12-month basis.
The award of two additional contracts related to the North Warning System,
representing approximately $5MM in annual revenue, will be announced
shortly. CHL currently services these two contracts, which are due to expire
September 30, 2009.
We expect no change to the distribution
rate and the balance sheet remains strong with zero debt and tangible BVPS

Canadian Helicopters Income Fund Solid Q2 Attractive Valuations

admin — Thu, 20 Aug 2009 04:17:20 +0000

CHL reported Q2/09 EBITDA of $10.3 million versus $9.1 million in Q2/08
Total revenue was essentially flat Y/Y despite a 27% drop in flight hours.
EBITDA margins improved by 2.9 points Y/Y.

Resource-based demand was weak, as expected, resulting in a 44.5%
decline in domestic VFR revenue. Soft VFR demand should have a more
pronounced impact in Q3, the company’s seasonally busiest quarter. We
expect EBITDA to decline Y/Y in Q3/09.

The company’s balance sheet is very strong with zero debt and tangible
book value of $7.97 per unit. CHL has roughly $9 million in cash and an
undrawn $55 million credit facility. The company made a small $2 million
investment in Q2/09 and is looking for further investment opportunities.

CHL is inexpensive at 4.5x 2010E EBITDAR and a yield of 11.3%. Solid
profitability, a strong balance sheet and valuations.

TSX Commentary » Canadian Helicopters Income Fund

Helicopters Income Fund distribution should be maintained despite lost contract hit

Canadian Helicopters Income Fund Solid Q2 Attractive Valuations