SMBC Aviation Capital builds strong momentum for the half year ended 30 September 2021, amidst sector recovery

Editor -

Dublin, 18 November 2021: SMBC Aviation Capital, one of the world’s leading aircraft leasing companies, today announces its results[1]for the half year ended 30 September 2021.

Financial Results – Half Year ended 30 September 2021

  • Profit before tax of $94.2 million, compared to $17.3 million in H1 FY20, with performance reflecting the continued improvement in the sector environment.
  • Expect improving trend will continue on the back of recovering airline and investor demand for our aircraft, as well as the positive impact of the high quality transactions we have closed over the past 18 months.
  • Continue to transition portfolio into new technology aircraft, with $4.4 billion of new technology transactions since the onset of the crisis, of which $3.0 billion were delivered as of 30 September.
  • The narrow body focus of our portfolio, a significant 82% by Net Book Value, is strongly aligned with short haul, regional led traffic recovery which is underway.
  • Reflected in increasingly strong demand for Airbus A320 NEO and Boeing MAX 737 narrow body aircraft with leading airlines globally seeking to capitalise on pent-up demand.
  • Placed 31 aircraft from Airbus A320 NEO and Boeing 737 MAX order books.
  • Recovery in investor demand reflected with 6 sold aircraft and LOIs/Contracts signed for a further 10 aircraft.
  • Total assets were $16.6 billion at 30 September 2021, $1.5 billion higher compared to the prior year period, reflecting increased aircraft acquisition activity.
  • Strong strategic alignment and support from shareholders, SMBC and Sumitomo Corporation with $11.8 billion of support – comprising $3.1 billion of equity and $8.7 billion debt financing.
  • In October, issued a second $500 million bond of the financial year capitalising on A- ratings and industry leading pricing levels. Average cost of debt of 3.1% reflecting the ability to secure competitively priced debt.
  • Available liquidity of $4.2 billion from diversified funding sources with 100% unencumbered asset base.

Commenting on the company’s performance, Eithne Manning, acting CFO, SMBC Aviation Capital said:

“We are continuing to see very positive signs across the market as the recovery strengthens. While challenges remain, we are entering a more normalised operating environment.

Our H1 profitability reflects the positive trends that have underpinned our improved performance. We are very encouraged as we see growing airline and investor demand for our aircraft. As anticipated, the short haul and low-cost sector is driving the pace of the recovery in several key markets as travel returns and the vaccine roll out continues.

Our ability to deploy capital flexibly, allied with our young, narrow-body focused portfolio, which is comprised of 61% new technology aircraft that are the most fuel efficient, lowest polluting technology on the market, has us very well placed to take advantage of the opportunities being presented by the recovery as we move into the second half of the financial year.”