Embraer sees profits drop by 70%

Embraer is a leading producer of jets seating 70 to 110 passengers

Brazilian aircraft maker Embraer has reported a 70% fall in profits following a sharp decline in Brazil's currency against the dollar.

Embraer, which produces medium-sized commercial jets, made a $57.7m profit from July to September, as against $194.9m in the same period of 2007.

Brazil's currency, the real, lost almost a third of its value in August amid the global financial crisis.

Embraer's sales for the third quarter rose to $1.5bn.

In its latest statement, the company maintained its estimate of delivering up to 200 commercial jets in 2008.

Dollar exposure

Embraer has invested in a range of financial instruments designed to hedge against fluctuations in the value of the Brazilian real.

However, the aircraft maker admitted that the sudden rise of the dollar against the Brazilian currency had caused a loss of $92.9m (£58.4m) in the value of its derivatives positions.

Embraer employs 20,000 people in Brazil, but the company also has investments in Portugal, the United States and China.

Embraer's list of clients includes Lufthansa, Air France-KLM, Japan's JAL and Virgin Nigeria.