Avolon's second-quarter 2023 results

Avolon, the international aircraft leasing company, has just released details of its second-quarter 2023 results which show the firm saw lease revenue increase by 14%. The highly regarded firm also placed orders for 40 Boeing aircraft and 20 new Airbus A330neo jets and these new aircraft are scheduled to be delivered between 2026 and 2028.

The deal was signed at the Paris Air Show and at the time, Christian Scherer, Chief Commercial Officer and Head of International at Airbus said: "It’s fantastic to see Avolon once again commit additional investment in the A330neo aircraft and lead the lessor market reordering widebody aircraft. Avolon’s vision and timing could not be better with this commitment for a further 20 aircraft to its portfolio. Avolon will benefit from the strong wave of growth and replacements that we currently observe across all markets."

Andy Cronin, Avolon CEO, commented: “This was an excellent quarter for Avolon which demonstrates the positive net income and lease revenue trajectory of the business. Our increased trading and sale and leaseback activity, along with placement from our order book at attractive lease rates, will drive our financial performance in the future setting the foundation for long-term profitability.

 

Our commitment with Boeing for 40 new 737 MAX aircraft and Airbus for 20 new A330neo aircraft reflects our confidence in the future outlook of the industry and our customers’ demand for additional aircraft to meet future growth plans in an undersupplied market.”

Key Highlights....

• Strong performance in net income with a 9x increase year-on-year to US$76 million;

 

• 22% increase in operating cashflow to US$371 million;

 

• 14% increase in lease revenue year-on-year to US$613 million;

 

• Raised US$3.4 billion of debt capital in the quarter, including:

 

•      Private offering of US$750 million of senior unsecured notes maturing in 2028;

 

•      US$1.7 billion Term Loan B refinancing with new loan maturing in 2028; and,

 

•      Letter of intent for a US$950 million term financing facility maturing in 2030;

 

• Total available liquidity of US$7.3 billion, including US$401 million of unrestricted cash, US$6.2 billion of undrawn debt facilities and US$616 million of contracted sales;

 

-        Net debt to equity of 2.2 times, a secured debt to total assets ratio of 22% and US$15 billion of unencumbered assets; and

 

• Fitch affirmed Avolon’s BBB- rating and improved the rating outlook from Stable to Positive.

2023 SECOND QUARTER | FINANCIAL HIGHLIGHTS

 

income statement (US$M)	Q2 2023	Q2 2022	CHANGE	CHANGE%
Lease Revenue	613	539	74	+14%
Operating Cashflow	371	305	66	+22%
Net Income	76	8	68	9x
EBITDA	578	486	92	+19%

 

BALANCE SHEET (US$M)	Q2 2023		FY 2022		CHANGE	CHANGE%
Total Available Liquidity (incl contracted sales)		7,263		5,567	1,696	+30%
Total Assets	29,985		30,796		(811)	(3%)
Secured Debt / Total Assets	22%		22%		-	-
Net Debt to Equity	2.2x		2.3x		(0.1x)	(6%)

 

 

 

 

2023 SECOND QUARTER | FLEET HIGHLIGHTS

• Executed 31 lease transactions comprising new aircraft leases, follow-on leases and lease extensions;

 

• Entered into letters of intent for the sale and leaseback of 9 aircraft;

 

• Confirmed order for 40 Boeing 737 MAX aircraft and agreed to order 20 Airbus A330neo aircraft;

 

• Delivered 5 new aircraft and transitioned 13 aircraft to a total of 10 customers;

 

• Sold 3 aircraft and executed sale agreements for a further 17 aircraft;

 

• Entered into letters of intent to place 23 aircraft from our orderbook during the quarter;

 

• Added 2 new customers, giving a total of 149 airline customers operating in 65 countries; and,

 

• Ended the quarter with an owned, managed and committed fleet of 875 aircraft, including  orders and commitments for 297 fuel-efficient, new technology aircraft.