Bombardier Inc. has once again slashed its financial estimates for 2019 on the back of continuing struggles in its rail unit, deepening investor concern that chief executive Alain Bellemare’s five-year turnaround can stay on track.
The Montreal-based plane and train maker also said it is weighing whether to pull out of its joint venture with Airbus and the Quebec government on the A220 airliner because of what could be onerous funding requirements. And it said it is pursuing further strategic options to speed up debt repayment, which could mean selling more real estate or other assets.
Bombardier shares tanked 33 per cent as they opened for trading Thursday on the Toronto Stock Exchange, to $1.20. The last time they were this low was March of 2016.
Mr. Bellemare is trying to get Bombardier back on course by making it a smaller and more profitable company focused on jets and rail equipment as part of a five-year turnaround effort that started in late 2015. Those business lines are more profitable and offer more growth prospects as the number of billionaires increases globally and cities seek more rail transit solutions for congestion, Bombardier executives have said.
Under the CEO’s leadership, Bombardier has already raised more than US$7-billion from governments and public markets, sold several businesses and cut thousands of jobs. After some encouraging signs of progress in 2017 and the first half of 2018, the company’s stock was starting to climb higher.
But the effort has hit some major stumbles since. Pushed to the brink by the cash-sucking development of its C Series airliner, Bombardier is now dealing with the completion of several legacy rail contracts that are wreaking havoc with its financial projections.
For the second time in 12 months, Bombardier issued a profit warning on Thursday that pinned much of the shortfall on trouble with big train contracts. It said it would record a fourth quarter loss of about US$230-million in its train unit, which includes a special charge related to certain projects in the United Kingdom as well as commercial negotiations with Swiss Federal Railways and increased production and manufacturing costs for projects in Germany.
“This is a significant setback,” BMO Capital Markets analyst Fadi Chamoun said in a note to clients. He noted that company executives had said in the summer that the worst might be behind the train unit, known as Bombardier Transportation.
The company now says adjusted earnings before interest and taxes will come in at about US$400-million for fiscal 2019, down significantly from the US$700-million to US$800-million it projected during its third quarter earnings report in August. Revenue should come in at about US$15.8-billion, down from a previous estimate of US$16.5-billion to US$17-billion, Bombardier said. The company now expects to burn through US$1.2-billion of cash for the year, more than twice as much cash as previously forecast.
At its annual investor meeting in December 2018, Bombardier highlighted five big rail contracts that were proving problematic in different ways. They included the US$630-million contract for New York’s Metropolitan Transportation Authority (MTA) in which Bombardier experienced production-related delays at its factories, and a US$1.8-billion contract with Swiss Federal Railways in which the company faced regulatory authorization issues.
Earlier this month, the MTA pulled about 300 Bombardier subway cars out of service because of unreliable door mechanisms. “Bombardier sold us lemons,” the city’s comptroller, Scott Stringer said at the time.
Despite the challenges, Bombardier insists it is making progress completing the legacy rail projects and taking the right actions for its future success. The business is led by Danny Di Perna, former head of Bombardier’s engineering and aerostructures unit.
While Bombardier has exited commercial aviation, its joint venture with Airbus on the A220, formerly the Bombardier C Series, also poses a lingering challenge. Airbus is winning orders for the plane but the latest information of the joint venture’s financial plan calls for additional cash investments to support production increases while pushing out the break-even point and generating lower return over the life of the program, Bombardier said.
“This may significantly impact the joint venture value,” Bombardier said, adding it could take a write-down on the business when it reports fourth quarter results next month. The company said is weighing its continued participation in the joint venture but provided no other details.
Bombardier sold control of the A220 to Airbus in 2018. It holds a 33.58 per cent stake in the venture, while Airbus holds a 50.06 per cent stake and Quebec holds 16.36 per cent.
Bombardier is contractually committed to investing US$925-million over three years in the joint venture, spokeswoman Jessica McDonald said. Any investments required in the business beyond that is shared by the three partners according to their weight in the joint venture, she said.
Quebec is not required to put any additional funds into the venture but its share in the business would shrink accordingly, Ms. McDonald said. A spokesman for Quebec Economy Minister Pierre Fitzgibbon declined to comment Thursday on the government’s plans for the investment.
The final step in Mr. Bellemare’s turnaround plan is to cut Bombardier’s indebtedness and solve its capital structure. The CEO said Bombardier is “actively pursuing alternatives” that would allow the company to speed up debt repayment and strengthen its balance sheet but did not provide any more details.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
Drugmaker Novavax begins late-stage vaccine trial in U.K. – CTV News
U.S.-based Novavax has begun a late stage trial of its potential COVID-19 vaccine in the United Kingdom because the high-level of the coronavirus circulating in the country is likely to produce quick results, the pharmaceutical company said.
Novavax plans to test the effectiveness of its vaccine in a trial involving 10,000 people between the ages of 18 and 84, according to a statement issued late Thursday. At least 25% of the subjects will be over the age of 65, and 400 participants will also receive a licensed flu vaccine.
The trial is being conducted in partnership with the U.K. government’s Vaccine Taskforce, which was created in April to help speed the development of a COVID-19 vaccine.
“With a high level of SARS-CoV-2 transmission observed and expected to continue in the U.K., we are optimistic that this pivotal phase 3 clinical trial will enrol quickly and provide a near-term view of (the vaccine’s) efficacy,” Dr. Gregory M. Glenn, head of research and development for Novavax, said in the statement.
The announcement comes as COVID-19 cases continue to rise across the U.K. The government reported 6,634 new positive test results on Thursday — the U.K.’s highest daily number since the pandemic began. Britain has the deadliest outbreak in Europe, with nearly 42,000 confirmed COVID-19 deaths.
Drugmakers are rushing to develop COVID-19 vaccines with the backing of governments desperate to find a way of easing restrictions that have hammered the world economy.
The U.K. has already agreed to buy 60 million doses of the Novavax vaccine to ensure it can be distributed as quickly as possible if it is approved by regulators.
The government said Friday that participants in the Novavax trial will be drawn from the 250,000 people who have volunteered to take part in COVID-19 vaccine testing through the National Health Service’s Vaccine Registry.
“Finding a safe and effective vaccine that works for the majority of the U.K. population is the best way to tackle this devastating disease,” said Kate Bingham, chair of the government’s Vaccines Taskforce. “Whilst social distancing, testing and other measures can help reduce the impact of coronavirus, the only long-term solution to beating it will be finding a vaccine.”
Novavax also pledged to publish details of its vaccine testing protocol “to enhance information-sharing during the worldwide pandemic.”
Drugmakers are under pressure to release more information about the progress of their vaccine trials — information they normally wouldn’t release until the trials are complete — to increase public confidence in their work.
Several other big pharmaceutical firms, including AstraZeneca, Moderna and Pfizer, have already released the protocols for their trials.
Demand for sports equipment and home gyms booms as Canadians prepare for pandemic winter – CBC.ca
Canadians in need of sports equipment and fitness gear to stay healthy and have fun during a pandemic winter have learned a valuable lesson: Shop early to avoid disappointment.
“People saw what happened with kiddie pools and fitness equipment in the spring,” said Gillian Montgomery, who co-owns Skiis and Biikes, a sporting goods chain with three locations in southern Ontario. Her stores are already unusually busy.
“Normally we don’t have interest in winter products until we see the snow and even until Christmas, but this year we’ve had maybe 30 calls just since September about getting cross-country skiing equipment.”
At Calgary’s Abom Ski & Board, owner Randy Ahl already has a “big, long” waiting list for entry-level cross-country ski packages that haven’t even arrived at the store yet.
Wait lists already growing
“Whether it’s a couple or a family, they’re saying, ‘We want a phone call when those things come in,'” said Ahl, who has already outfitted entire families with boots, poles and skis that he does have in stock. “I consider over $2,000 to be a fairly big purchase, and that’s happened already more than a dozen times.”
People who plan to exercise indoors are prepping as well.
Drew Berner has installed a home gym in his Toronto garage.
I fully intend to be out there all winter long,” said the father of three-year-old twins. “My garage is detached, but it is insulated, and I’m going to get a little space heater.”
Early in the pandemic with gyms locked down, health-conscious Canadians made alternate arrangements, following along with exercise instructors on YouTube, joining classes held in parks, or buying exercise gear to use at home.
But many retailers were unable to satisfy demand for sporting goods and fitness equipment. Canadian Tire experienced triple-digit growth in the category.
“Consumer demand far exceeded both historical demand and available inventory,” the company said in a statement to CBC News.
A sense of urgency
When Berner tried to find a set of weights, an exercise bike and a rowing machine for his garage gym, he found most were already sold out. Only by persisting was he able to get what he needed. He spent $3,000 on a mix of new and second-hand equipment.
“That involved everything from having alerts set on Kijiji … to having email alerts from stores so I would be notified as soon as they had things I wanted in stock,” said Berner, noting that he had to act fast before another buyer scooped them up.
Now, as cases of COVID-19 surge across Canada, national fitness chains such as GoodLife Fitness and F45 Training remain open — with limited capacity. Even so, some gym members are unwilling to return to an environment where people breathe heavily and sweat. And the market for used goods is again red hot.
The most popular search terms on online seller Kijiji are still dumbbells, ellipticals and exercise bikes, said company’s manager of community relations, Kent Sikstrom.
Second-hand Peloton Bikes have more than doubled since this time last year, while inquiries about elliptical machines are up 39 per cent and treadmills inquiries are up 15 per cent.
“Probably in the next couple of weeks we may see snow shoes, cross-country skis, sleds, and snowboard begin to create a new trend for the season,” said Sikstrom.
eBay Canada, which sells both new and used goods, is also reporting significant increases. Stair machines are up 230 per cent from this time last year, while treadmills sales are up 280 per cent, according to the head of the Canadian operation, Rob Bigler.
Gear not essential
“We’ve been super busy,” said Bigler. “It’s a great time to sell that treadmill that’s been sitting in your basement, maybe being used to hang up laundry.”
But Samantha Monpetit-Huynh, a fitness coach and trainer in Toronto, pointed out that a lot of gear isn’t essential to stay active and healthy.
“People forget your body is probably the best piece of equipment you’ve got,” she said. “You don’t need all this stuff — you just need to move and you need to do it regularly. More than once a week.”
Monpetit-Huynh said it’s possible to use laundry detergent bottles or soup cans as weights, and go for walks or runs. However, she recently invested $3,000 in a brand-new Peloton exercise bicycle that allows her to join spinning classes remotely.
“I love going to the gym, but I thought, ‘You know what? I should get something because if we get a second wave I want to be prepared.'”
Berner said for him, there’s more to it than fitness.
“Exercise is crucial for my mental health,” he said. “I notice even if I go for a couple of days without exercise my mood starts to drop.”
Other Canadians who feel the same and haven’t yet made a plan would be well advised to start considering their options — or risk getting left out in the cold during a long pandemic winter.
Did you return from Teck mine in B.C.? Get tested and stay isolated, says N.L. government – CBC.ca
The Teck coal mine in Elkford, B.C., has suffered an outbreak of COVID-19 and any workers who returned to Newfoundland and Labrador in the last 14 days are told to stay home and get tested.
That means every worker who came back on or after Sept. 14 must isolate away from their families, and stay at home for the full 14 days regardless of their test results.
The Department of Health and Community Services is also asking anyone who came back from the mine after Aug. 31 to get tested for COVID-19 out of an abundance of caution.
This is the fourth work site identified by the Newfoundland and Labrador government that has suffered an outbreak. Outbreaks at the Canadian Natural Albian oil sands site, the Syncrude Mildred Lake oil sands site, and the Suncor base plant site — all in Alberta — are still active.
The rules for rotational workers from Newfoundland and Labrador who travel outside the Atlantic Provinces do not apply to work sites that have active outbreaks. While others can leave isolation after a negative test result, workers from outbreak sites must remain isolated during their time at home.
Crisis, what crisis? If Canada is in a 2nd COVID wave, N.L. is watching it from afar – CBC.ca
Social media and COVID shaming: Fighting a toxic combination – CTV News
Lightning-Stars stream: 2020 NHL Stanley Cup Final – NHL
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Richmond BBQ spot speaks out about coronavirus rumours Vancouver Is Awesome
- Art18 hours ago
Novelist Ali Smith Finds Art for All Seasons
- Sports22 hours ago
Blue Jays have key decisions to make in coming days as post-season nears – Sportsnet.ca
- Tech16 hours ago
Apple Watch Series 3 vs Apple Watch SE: Which should you buy?
- Health15 hours ago
Toronto's top doctor orders closure of four businesses over concerns about transmission of COVID-19 – CP24 Toronto's Breaking News
- Media17 hours ago
State Department revoked award for journalist over social media posts critical of Trump and lied about it, watchdog finds
- Media23 hours ago
Anaconda Mining fires employee for racist, homophobic social media posts – CBC.ca
- News17 hours ago
Today’s coronavirus news: Federal deficit hits $148.6 billion; Ford announces tougher COVID-19 restrictions as 409 new cases reported – Toronto Star
- Health8 hours ago
Toronto’s top doctor issues ‘warning to the entire city’ as new cases surpass 200 in single day