SMBC Aviation Capital results for the year ended 31 March 2020

Editor -

Dublin, 3 June 2020: SMBC Aviation Capital, one of the world’s leading aircraft leasing companies, today announces its results [1] for the financial year ended 31 March 2020 and provides an update on the impact of Covid-19 on its business.

Financial Results – year ended 31 March 2020

  • Profit before tax of $364.5 million, an increase of almost 5.8% y/y, a record level
  • Total aircraft operating lease assets grew by 3.7% to $10.6 bn - a lower than anticipated level of asset growth due to the grounding of the B737 MAX aircraft and Airbus A320 NEO delays
  • Core lease rentals increased by $55.8 million to $1.1 bn - a 5.5% increase
  • EBITDA of $1.1 bn, with EBITDA to interest coverage remaining strong at 3.6 times
  • Operating margin of 40.5% - above long-term target of 40%
  • Deferral of 68 Boeing 737 Max aircraft until 2025-2027
  • Strong strategic alignment and support from our shareholders, SMBC and Sumitomo Corporation with $10.6 bn support - comprising $2.9 billion of equity and $7.7 bn debt financing of which $3.2 bn was undrawn as at 31 March.
  • Available liquidity of $6.3 bn due to diversified funding sources and unrestricted cash balance as at 31 March, 2020
  • New technology aircraft now comprises 48.3% of our portfolio up from 37% on the previous year
  • One of the lowest weighted average age portfolios in the industry of 4.1 years (81% of aircraft are narrowbody aircraft)

Commenting on the company’s performance, Peter Barrett, CEO, SMBC Aviation Capital said:

“Our thoughts are with those who have been adversely affected by Covid-19 and we would also like to acknowledge the efforts made by our colleagues who have supported our customers during this very challenging period.

The pandemic will have a significant and potentially prolonged impact on the aviation industry. However, this period has also demonstrated the importance of air travel to the global economy and we believe that the sector will work together to address the current challenges to support economic recovery.

SMBC Aviation Capital came into this crisis in a very strong financial position, with a business model built to perform through the cycle, not just the favourable market conditions seen in recent years. Being owned by a substantive and supportive Japanese financial institution together with our disciplined asset investment strategy positions us well to manage the challenges of this changing operating environment and take advantage of opportunities that will arise.

We have a strong management team, who have navigated through many crises, which provides us with confidence that as a business we are well positioned to manage current challenges and emerge stronger as a result.”