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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Welcome to the CHC Helicopter Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If anyone has any difficulties hearing the conference, please press star 0 for operator assistance at any time. I would like to remind everyone that this conference call is being recorded on Tuesday, March 15, 2005, at 10:30 a.m. Eastern time. I would now like to turn the conference over to Mr. Sylvain Allard, President and Chief Executive Officer, and Mr. Jo Mark Zurel, Senior Vice President and Chief Financial Officer. Please, go ahead.
SYLVAIN ALLARD, PRESIDENT AND CEO, CHC HELICOPTER: Thank you Brenda. Good morning, everyone.Thank you for joining this conference call. As for the Safe Harbor clause, we are going to discuss certain subjects that may contain forward-looking information. The company cautions you that actual results could differ materially from those that may be projected in those discussions. Additional detailed information concerning a number of factors that could cause results to differ materially from the information that will be given is readily available on the company's form 20-F for the year ended April 30, 2004.
Now let's review our third quarter. As you read in our press release, our results from operations continue to be strong and well ahead of last year. This third quarter has been very important for CHC as we continue our restructuring initiatives throughout the company and announce the creation of Heli-One. We also acquired the assets and capability of Coulson and completed the sale of two noncore components of Schreiner for a net gain of $7.5 million. Revenue for the quarter was $226 million compared168.9 million to last year. This increase of $57 million is due primarily to the acquisition of Schreiner which contributed 37.3 million in the quarter.
In addition, the company's International segment experienced a strong growth of 21.4 percent in revenue, representing a 10.5 million increase compared to the same period last year. Consolidated segment EBITDA for the third quarter increased 41.5 percent to $42.4 million, compared to 29.9 million in the same period last year. The consolidated EBITDA increase of 12.4 million was realized primarily through the inclusion of Schreiner, the increased activity in the International and European Flight segments, and growth in Repair and Overhaul segments. I'm pleased to see year-to-date margins exceeding 19 percent, thanks to our cost-cutting efforts in Europe and strong results in the International operations where segment EBITDA increased almost 84 percent in the third quarter Growth in our Repair and Overhaul segments for new businesses acquired also helped fuel the growth in EBITDA.
Net earnings from continuing operations were 17.3 million or $0. 76 per share, which included after tax restructuring, debt settlement and other costs of 3.2 million, for a combined $0.14-per share impact. Without these costs, our net earnings from operations came in at $20.5 million or $0.90 per share, up 6.3 million or 43 percent compared to last year. As a result of the sale of two noncore businesses of Schreiner, we realized a net gain of $7.5 million. The potential sale of Composites, the remaining business held for sale is contingent on the acceptance of certain terms and conditions by the government of Newfoundland and Labrador and successful negotiation of the sale with a third party.
In total, flight hours were up 8,125 representing a 25 percent increase from the same period last year. The addition of Schreiner and increases in international operations were partially upset by a decrease in the European flight hours as a result of the expiring of the BP contract earlier this year. North Sea activity is continuing to increase. Third quarter helicopter passengers flying offshore from Aberdeen Airport increased 9.5 percent from the same period last year and has increased for 3 consecutive periods since the third quarter of fiscal '04. The February stats published last week continue to show strong improvement with a 15 percent increase compared to February last year.
I will now provide highlights of operating results by segment. First, our European Flying segment. Revenue from helicopter operations in Europe was $108.1 million for the third quarter, compared to 104.7 million for the same period last year. Its $3.4 million increase was primarily attributable to an increase in flying revenue of $2.4 million and a favorable foreign exchange impact of $500,000. The flying revenue increase relates to general increased activity from Norwegian and Aberdeen-based North Sea customers, which more than offset reductions from the BP contract that expired in August earlier this year.
Segment EBITDA was 16.6 million compared to $14.5 million for the same period last year, up $2.1 million. The segment EBITDA increase was primarily attributable to increased margins on contracts replacing the low-margin BP contract, reduced operating costs due to the restructuring initiatives completed in the prior fiscal year and the favorable foreign exchange impact. This improvement in EBITDA was upset by additional costs of $1.8 million resulting from a dispute with our pilots in Denmark during the quarter. The dispute forced us to enter into a short-term lease agreement with a third-party helicopter operator to satisfy our contractual obligations with a customer in Denmark.
During the third quarter, we were also informed that Talisman Energy, UK Ltd., decided not to renew its contract for the Super Puma MkII, based in Aberdeen, Scotland. The contract, valued at approximately $22 million per year, runs until March 2005. Even though …