Embraer hedging sees profits fall

Embraer has cut jobs in order to counteract expected lower shipments

Brazilian planemaker Embraer reported a 44% fall in fourth-quarter profits due to currency hedging losses as the Brazilian real continued to fall.

The world's fourth-largest planemaker saw net income fall to $111.7m (£77.4m) from $200.9m a year earlier.

Currency-related derivative losses totalled $121m as the Brazilian real continued to weaken, losing 18% against the dollar in the quarter.

Some 95% of Embraer's sales are paid in dollars.

Hard times

Embraer's declining fortunes were also reflected by the fact that it delivered 59 aircraft during the three-month period, two fewer than the same period a year previously.

The planemaker has been beset by difficulties as the economic downturn continues to bite.

It has twice reduced its deliveries estimate for this year as customers postpone or cancel their orders, and it has implemented a series of job cuts in order to balance anticipated lower shipments.

Embraer's chief executive, Frederico Fleury Curado, has said that he expects sales to pick up again in 2011.

Embraer, which specialises in regional jets, vies with Canada's Bombardier for the position of the world's third-largest planemaker, after Boeing of the US and Airbus in Europe.