Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Eve Holding Inc (EVEX, Financial) successfully completed the assembly and rollout of its first full-scale engineering prototype, marking a significant milestone in its development program.
- The company has secured a total preorder backlog of 2,900 aircraft, valued at USD 14.5 billion, indicating strong market interest and potential future revenue.
- Eve Holding Inc (EVEX) has completed the selection of primary component suppliers, ensuring a robust supply chain for its eVTOL development.
- The company raised an additional $96 million in equity from strategic investors, enhancing its financial position and extending its liquidity runway to 2027.
- Eve Holding Inc (EVEX) has secured contracts for maintenance, repair, and overhaul (MRO) services, potentially generating up to $1.2 billion in revenue over the first five years of operation.
Negative Points
- Eve Holding Inc (EVEX) reported a net loss of $36 million in the second quarter of 2024, reflecting the high costs associated with its program development.
- The company faces potential delays in its test campaign due to the critical path of electric motor deliveries, which are essential for the flight test campaign.
- Eve Holding Inc (EVEX) is still in the preoperational phase, with financials primarily reflecting development costs rather than revenue generation.
- The company anticipates a higher cash burn in the coming years as it ramps up development and begins assembly of conforming prototypes.
- Eve Holding Inc (EVEX) has yet to convert its nonbinding Letters of Intent into firm orders, which could impact future cash flow and financial stability.
Q & A Highlights
Q: What is the timeline for the delivery of electric motors, and how does it affect the building of certification conforming prototypes?
A: Johann Bordais, CEO, explained that the electric motors for the engineering prototype are expected to be delivered in the second semester. Luis Valentini, CTO, added that the motors' arrival will allow for the completion of production tests and the start of the flight-testing campaign. The development of conforming prototypes is progressing in parallel, and the learnings from the engineering prototype will be integrated into them.
Q: How does Eve plan to manage liquidity given the expected increase in cash burn next year?
A: Eduardo Siffert Couto, CFO, stated that while there will be a higher cash burn next year due to increased activity, the recent depreciation of the Brazilian currency against the dollar will help reduce cash consumption. The company is working on detailed budgets and expects to provide more information by the end of the year.
Q: Can you provide more details on the test sites and the timeline for the test campaigns?
A: Luis Valentini, CTO, outlined that the test campaign will start with hover flight tests, followed by partial transition tests, and eventually full transition flights. The engineering prototype will help refine models and prepare for the certification flight test campaign with conforming prototypes, which will begin next year.
Q: What is the rationale behind the recent equity raise, and how does it impact Eve's financial runway?
A: Eduardo Siffert Couto, CFO, explained that the equity raise was an opportunity to bring in strategic investors and strengthen liquidity. With the additional funds, Eve now has resources to support operations until 2027, providing a comfortable financial position to advance the program.
Q: How does Eve plan to handle aftermarket support for its eVTOLs?
A: Johann Bordais, CEO, stated that Eve will be the face to the customer for aftermarket support. The company is considering various models, including using Embraer's extensive MRO network, to ensure operational cost efficiency and availability for customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
