11/13/2012 11:06 EST | Updated 01/13/2013 05:12 EST

HNZ Group disappoints as Q3 profit drops 20 per cent due to expired contracts

MONTREAL - HNZ Group Inc. missed expectations after the helicopter transportation company's revenues and profits nosedived in the third quarter due to the expiry of contracts in Afghanistan and for air ambulance services in Ontario.

The company formerly known as Canadian Helicopters Group earned $16.1 million, or $1.23 per share for the period ended Sept. 30. That compared to $20.5 million or $1.56 per share in the prior year.

Revenues decreased 18 per cent to $70 million from $85.4 million in the year-ago period.

Analysts had expected that the Montreal-based company would earn $1.39 per share on $74 million of revenues in the quarter.

HNZ Group (TSX:HNZ.A) said revenues in its southern hemisphere operations were stable, but northern hemisphere revenues were hurt by the expiry of the ORNGE emergency medical services contract in March and the conclusion of one contract in Afghanistan last November.

The company flew 22,824 hours, a drop of 21.4 per cent from the 29,047 hours in 2011.

CEO Don Wall said the company generated "satisfactory financial results" in the quarter, reflecting the termination of the two contracts.

He said the Ontario contract will negatively affect results for the next six months.

With its solid financial position, HNZ will continue to search for growth opportunities from acquisitions and internal fleet expansion.

HNZ provides helicopter transportation and related support services in Canada, Australia, New Zealand and regions of Southeast Asia as well as Afghanistan and Antarctica.

It operates about 140 helicopters and employs approximately 800 people.

On the Toronto Stock Exchange, its shares fell 80 cents, or 3.41 per cent, at $22.65 in morning trading.