2023 First Quarter Results

Rhea-AI Summary

Avolon's Q1 2023 results highlighted strong demand in the aircraft leasing market, reporting $599 million in lease revenue and a net income of $56 million, up from a loss of $182 million in Q1 2022. Despite an 8.97% decrease in lease revenue compared to Q1 2022, operating cash flow remained robust at $310 million. The company secured an $810 million financing facility and ended the quarter with total liquidity of $5.5 billion. Avolon maintained a stable net debt to equity ratio of 2.3x and reported a secured debt to total assets ratio of 21%. The fleet included 578 aircraft, with significant commitments for new technology aircraft. Avolon also announced a commitment for 40 Boeing 737 MAX aircraft, set for delivery from 2027 to 2030, valued at over $4 billion.

Positive

• Net income of $56 million, a significant turnaround from a loss of $182 million in Q1 2022.
• $310 million generated in operating cash flow, indicating strong operational performance.
• Secured $810 million in term financing, enhancing liquidity.
• Total available liquidity of $5.5 billion, ensuring financial stability.
• Fleet of 578 aircraft with plans for 40 new Boeing 737 MAX aircraft commitments.

Negative

• Lease revenue decreased by 8.97% from Q1 2022.
• Adjusted net income fell to $56 million from $80 million in Q1 2022.

Avolon first quarter performance driven by strong aircraft demand and rising lease rates

DUBLIN--(BUSINESS WIRE)-- Avolon, the international aircraft leasing company, announces results for the first quarter (Q1) of 2023.

2023 FIRST QUARTER | FINANCIAL HIGHLIGHTS

INCOME STATEMENT ($M)	Q1 2023	Q1 2022	CHANGE
Lease Revenue	599	658	(59)
Operating Cashflow	310	320	(10)
Reported Net Income	56	(182)	238
Adjusted Net Income*	56	80	(24)

BALANCE SHEET ($M)	Q1 2023		FY 2022	CHANGE
Total Available Liquidity	5,527		5,567	(40)
Total Assets	30,224		30,796	(572)
Secured Debt / Total Assets	21%		22%	(1%)
Net Debt to Equity	2.3x		2.3x	-
*Adjusted Net Income (a non-GAAP measure) excludes the impact of impairment and write-off of lease associated balances in respect of Russia

- Delivered $599 million of lease revenue and net income of $56 million for the quarter;

- Generated $310 million of net cash from operating activities;

- Executed a $810 million term financing facility maturing in 2030, with a syndicate of 10 banks;

- Ended the quarter with total available liquidity of $5.5 billion, including $403 million of unrestricted cash and $5.1 billion of undrawn debt facilities; and

- Ended the quarter with net debt to equity of 2.3 times, a secured debt to total assets ratio of 21% and $16 billion of unencumbered assets.

2023 FIRST QUARTER | FLEET HIGHLIGHTS

- Owned and managed fleet of 578 aircraft at quarter end, with total orders and commitments for 252 fuel-efficient, new technology aircraft;

- Average owned fleet age of 6.3 years with an average remaining lease term of 6.9 years;

- Executed 31 lease transactions in the quarter comprising new aircraft leases, follow-on leases and lease extensions;

- Delivered 9 new aircraft and transitioned 9 aircraft to a total of 13 customers;

- Agreed letters of intent for the sale and leaseback of 12 aircraft;

- Sold 2 aircraft and agreed letters of intent for the sale of a further 13 aircraft;

- Added 3 new customers during the quarter, for a total of 147 airline customers operating in 65 countries; and

- Orderbook is fully placed for 2023 and 82% placed to the end of 2024.

737 MAX AIRCRAFT ORDER

- Post quarter end, Avolon agreed terms for a commitment to order 40 Boeing 737 MAX aircraft;

- The aircraft are scheduled for delivery between 2027 and 2030 and are valued at over $4 billion at current list prices; and,

- Once this order is finalised, Avolon’s pro-forma owned, managed, and committed fleet will rise to 870 aircraft.

Andy Cronin, Avolon CEO, commented:

“Avolon benefitted from rising lease rates during the quarter as global passenger traffic continued to grow and the reopening of the Chinese market provided an important catalyst for increased travel in the region. Demand for aircraft remains strong, with high levels of leasing activity and a continued shortage of aircraft. This is supporting residual values and driving demand for lease extensions from airlines unable to access new deliveries. Our commitment with Boeing for 40 new 737 MAX aircraft reflects our confidence in the long-term outlook for the aviation sector. With our low leverage and high levels of liquidity, we are well positioned to take advantage of future opportunities.”

About Avolon

Headquartered in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai, Avolon provides aircraft leasing and lease management services. Avolon is 70% owned by an indirect subsidiary of Bohai Leasing Co., Ltd., a public company listed on the Shenzhen Stock Exchange (SLE: 000415) and 30% owned by ORIX Aviation Systems, a subsidiary of ORIX Corporation which is listed on the Tokyo and New York Stock Exchanges (TSE: 8591; NYSE: IX). Avolon is a global leader in aircraft leasing with an owned, managed and committed fleet, as of 31 March 2023 of 830 aircraft. www.avolon.aero

View source version on businesswire.com: https://www.businesswire.com/news/home/20230427005192/en/

David Breen / Joe Brennan

Avolon Investor Relations

ir@avolon.aero

T: +353 1 231 5800



Douglas Keatinge

Avolon Head of Communications

dkeatinge@avolon.aero

T: +353 86 037 4163

Source: Avolon

FAQ

What were Avolon's earnings for Q1 2023?

Avolon reported a net income of $56 million for Q1 2023.

How did Avolon's lease revenue change in Q1 2023?

Lease revenue decreased by 8.97%, from $658 million in Q1 2022 to $599 million in Q1 2023.

What is Avolon's outlook based on Q1 2023 results?

Avolon remains optimistic with increased lease rates and strong aircraft demand, reflected in their commitment to order 40 Boeing 737 MAX aircraft.

What is Avolon's total liquidity as of Q1 2023?

Total available liquidity was $5.5 billion at the end of Q1 2023.

How many aircraft does Avolon currently manage?

Avolon managed a fleet of 578 aircraft as of the end of Q1 2023.