Eve announces new government-backed credit lines following Q3 losses
Following net losses of $154m for the first nine months of 2022, Eve has announced two credit lines approved by Brazil’s National Development Bank worth $92.5m.
Eve reported a net loss of $36.7m for the third quarter (Q3), up almost ten-fold on the $3.8m in Q321 driven largely by higher R&D expenses. The R&D spend is primarily down to Eve’s master service agreement (MSA) with Embraer – which the OEM said intensified in the last year as its eVTOL design advances. Costs reached $14.3m in 3Q2022, up from $2.8m during the same period of 2021. R&D expenses in the 9M22 reached $33.8m which is five times the amount invested in the programme in the same period in 2021 ($6.6m).
The firm is also to receive support from Brazil’s National Development Bank (BNDES) with two credit lines, totalling $92.5m. Both lines come with a 12-year maturity and amortisation grace period. The first credit line is expected to be granted by the Fundo Nacional Sobre Mudança Climática or Climate Fund. The second from the Financiamento a Empreendimentos de Inovação or FINEM Inovação.
André Stein, co-CEO of Eve, said: “We appreciate the confidence and support that BNDES is showing to Eve as we continue to progress the development of a zero-emission aircraft with a commitment to a full-life cycle approach towards carbon neutrality. Not only will this foster innovation, but will support the emergence of a more sustainable form of aviation, our eVTOL aircraft, which will transform the industry and urban air mobility, reducing noise and the cost of flying. BNDES will be a critical partner to help Eve complete the design of our portfolio of products and services.”
Eve’s Q322 cash position of $329.9m, which is just down on the $330.8m it had at the beginning of the quarter, does not include the funding from BNDES. The firm also expects expects portions of its non-binding order backlog to be converted into firm contracts. Those firm orders could result in significant cash advances and inflows to the OEM through down payments that may occur prior to final delivery, said Eve.
Operating activities consumed $17m of cash in Q322, versus $2.4m in Q321. Net cash provided by financing activities came to $15m in Q322 thanks to investment from United Airlines.
During the first nine months of 2022, Eve burnt through $39.1m in cash to fund its operations, up from versus $7.5m in 2021. Net cash provided by financing activities has reached $352.7m so far in 2022, from a combination of the listing in the NYSE and the United Airlines Ventures investment.
The firm also does not have any debt on its balance sheet as of Q3’s-end. However, the firm notes that the proceeds from the deal with Zanite Acquisition and strategic investors combined with advances from customers and future finance lines are important sources of capital to fund Eve’s development and certification process.