Avolon: 2018 Full Year Results
Record annual profits after tax of USS$717 million
Avolon, the international aircraft leasing company, announces results for the 2018 full year.
2018 | Financial Highlights
|US$ MILLION||FY 2018||
|Profit for the year||717||550||30%|
|Total Available Liquidity||5,654||5,033||12%|
|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.”