UPDATE 2-Embraer CEO expects revenue to climb about 20% in 2024
(Adds details from CEO in paragraphs 4 and 6, adds details on GTF engine issue in 7-11)
By Valerie Insinna
NEW YORK, Nov 17 (Reuters) - Brazilian planemaker Embraer expects its revenue to grow by about 20% in 2024, its chief executive said on Friday.
CEO Francisco Gomes Neto, in an interview with Reuters, cautioned that the company's official financial forecast would not be available until early next year, but said it is currently expecting about 20% growth in revenue as well as deliveries.
That could put commercial jet deliveries at around 80 units next year, and business jet deliveries at about 140, said Gomes Neto, adding that those numbers are not yet official targets.
After introducing several new business and commercial jets since 2017, the company is in a "harvest season" where it is focused on increasing revenue and cementing new orders, Gomes Neto said told reporters earlier on Friday.
Embraer has the potential to reach annual revenue of $10 billion by 2030 without its electric air taxi subsidiary Eve Holding, he said. Including Eve, revenue could hit $14 billion over that time frame.
"In 2024-2025, we'll focus a lot on improving further our financial performance," Gomes Neto told Reuters. "I think in two years from now, we can talk about new airplanes for Embraer."
GEARED TURBOFAN IMPACT
For Embraer, a production quality crisis involving geared turbofan engines - made by the RTX subsidiary Pratt & Whitney - is both a headache and a potential source of income.
The company's E2 commercial jets are powered by the engine, while its Portuguese subsidiary OGMA is on track to open a maintenance facility to overhaul GTF engines in April, Gomes Neto said.
Once engine throughput at the maintenance hub is at full rate, annual revenue from GTF work will amount to roughly $500 million, said Carlos Naufel, who leads Embraer's services business. Naufel declined to say how many GTF engines would be inducted in 2024.
Multiple Embraer executives stressed that the troubles with the engine have not impacted sales, as Pratt & Whitney is now producing engines unaffected by the previous issue, which involves high pressure turbine blades made with contaminated powder metal that increases the risk of cracks.
Arjan Meijer, Embraer's commercial unit head, said some E2 jets may have to come in for maintenance work earlier than expected, but the issue is not expected to be as pervasive as in the Airbus A320neo fleet - where hundreds of jets
are expected to be grounded
at any one time through 2026.
However, GTF engine deliveries have run behind in 2023, putting pressure on Embraer's E2 delivery schedule. Gomes Neto said Pratt & Whitney's engine delivery schedule for 2024 remains "realistic, (but) always with some risks."
(Reporting by Valerie Insinna Editing by Bill Berkrot and Nick Zieminski)
