SMBC Aviation Capital results for the half year ended 30 September 2018

Key Highlights:

• Profit before tax of $168 million, up 7.5% compared to H1 2017 ($156.3 million)
• Core lease revenue of $490million up 3.5% compared to H1 2017 ($473 million) on slightly reduced average operating lease assets (-0.5%)
• Aircraft assets in excess of $11.2 billion, comprising 231 owned aircraft and pre-delivery payments
• Operating margin of 42.2% (H1 2017: 41.5%)
• $9.2 billion shareholder support
• 30.6% of portfolio transitioned to new technology assets (H1 2017: 15%) with upward trend set to continue
• Signed LOIs to place 44 aircraft from our order book with all 2018 and 2019 positions placed [note1]
• Sales of 8 owned aircraft with average age of 7.9 years, profit on disposal of $11.4m
• Signed contract for the sale of a 29 aircraft portfolio from our managed fleet
• Raised $700m of third party financing including successful $500m bond issuance in July 2018
• Asset spread 42% Asia, 31.2% EMEA, 26.8% The Americas

Commenting on the results, Peter Barrett, CEO of SMBC Aviation Capital, said: "I am pleased to report another solid half year performance, driven by our core lease rentals as a result of a transitioning of our portfolio into new technology aircraft, a strong period for trading aircraft and an overall strengthening of our capital base.

This performance again proves the strength of our strategy which has been centred on managing the quality of a young, technologically advanced and fuel efficient portfolio. This is coupled with our approach to risk management and the ongoing support of our shareholders which will be further evidenced with the injection of new capital of $1 billion, expected in the coming weeks.

We are taking advantage of the positive environment in the wider aviation market to continue to deliver for our customers and to optimally position our business as the industry prepares itself for higher fuel prices and interest rates.We have also created a strong aircraft placement and trading pipeline which alongside the strength of our business positions us well to manage the challenges and take opportunities that a changing operating environment brings."

[note1] - LOIs for 12 of these units were signed post 30 September 2018