Avolon, the international aircraft leasing company, announces results for the 2018 full year.
2018 | FINANCIAL HIGHLIGHTS
US$ MILLION FY 2018 FY 2017 CHANGE
Lease Revenue 2,569 2,343 10%
Profit for the year 717 550 30%
Total Available Liquidity 5,654 5,033 12%
Total Assets 27,153 27,109 0%
Secured Debt / Total Assets 42% 48% 600bps
Net Debt to Equity 2.2x 2.2x
Lease revenue for the year was US$2.6 billion; an increase of 10% year on year;
Generated US$2.2 billion of net cash from operating activities in 2018;
Delivered US$717 million in profit for the year, an increase of 30% year on year;
Declared and paid shareholder dividend of US$490 million;
At year end Avolon had US$16.6 billion future contracted rental cashflows; and
Ended 2018 with US$5.7 billion of available liquidity in unrestricted cash, undrawn revolving credit facilities and undrawn secured and unsecured debt.
2018 | Operating Highlights
Delivered a total of 33 new aircraft, including the world’s first A330neo;
Executed a total of 153 lease transactions and contracted sale agreements for 130 aircraft;
Sold 87 aircraft with total proceeds from disposal of property, plant and equipment of US$2.2 billion in 2018 with a further 58 aircraft held for sale at year end, representing US$1.2 billion of aircraft related assets;
Increased asset management activity with 49 managed aircraft at year end;
Fleet utilization was 99.5% for 2018;
Continued strong progress on placement of new order pipeline with 100% of committed fleet placed through to the end of 2019 and 80% placed through to the end of 2020;
Owned, managed and committed fleet increased by 7% year on year to 971 aircraft at the end of 2018; and
Average owned fleet age of 5.0 years with an average remaining lease term of 6.8 years.
2018 | Strategic Highlights
Added ORIX Aviation Systems as a new 30% shareholder and incorporated a revised governance structure enhancing protections for debt investors;
Accelerated momentum on our path to Investment Grade with Fitch placing Avolon on positive outlook and Moody’s upgrading Avolon’s corporate credit rating to Ba1;
Consolidated position as the third largest aircraft lessor with an order for 100 Airbus A320neo family aircraft, which positioned Avolon as Airbus’ largest aircraft lessor backlog customer;
Established two asset management platforms in partnership with third-party investors:
Jade Aviation in partnership with China Cinda Asset Management, one of the largest asset managers in China. At year-end Jade Aviation had acquired 6 aircraft from the Avolon fleet; and
Sapphire Aviation Finance platform, which acquired 41 aircraft from the Avolon fleet with the issuance of US$768 million of senior secured notes and a majority equity investment from a third-party investor.
Doubled the scale of Avolon’s unsecured revolving credit facility to $2.2 billion, providing total revolving debt capacity of $4.2 billion at year end; and
Reduced secured debt by US$1.6 billion during the year, increasing our unencumbered assets by US$2.9 billion to a total of US$8.7 billion at year end.
Dómhnal Slattery, Avolon CEO, commented: “2018 represents another excellent year for Avolon during which we successfully executed on a number of key strategic objectives – a testament to the hard work, focus and commitment of the Avolon team. It was a record year for the business in which we generated US$2.2 billion of net cash from operating activities and delivered a 30% increase in profit.
The addition of ORIX as a shareholder, coupled with the increase in our unencumbered assets and reduction in our secured debt, represents significant progress towards securing our Investment Grade rating – a key corporate objective for 2019.”