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  

FY 2017

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.”

This press release was sourced from Avolon on 13-Feb-2019.