Avolon: 2022 First Quarter Results

Rhea-AI Summary

Avolon, the leading aircraft leasing company, reported Q1 2022 financial results showing a lease revenue increase to $658 million compared to $470 million in Q1 2021. Despite a net loss of ($182 million) due to a $304 million impairment related to Russia, adjusted net income was $80 million. Total liquidity decreased to $5.4 billion, though debt capacity expanded to $5.9 billion. The fleet comprised 592 aircraft with active leases extending on average 6.9 years.

Positive

• Lease revenue increased to $658 million, up $188 million year-over-year.
• Generated $320 million of net cash from operating activities.
• Adjusted net income of $80 million excluding Russia impact.
• Liquidity at $5.4 billion, including $477 million unrestricted cash.
• Raised $300 million in unsecured debt facilities, enhancing revolving debt capacity.

Negative

• Net loss of $182 million due to a $304 million impairment related to Russian sanctions.
• Total available liquidity decreased by $884 million compared to FY 2021.

Avolon reports increased revenue and cash collections as borders reopen

DUBLIN--(BUSINESS WIRE)-- Avolon, the international aircraft leasing company, announces results for the first quarter (Q1) of 2022.

2022 FIRST QUARTER | FINANCIAL HIGHLIGHTS

INCOME STATEMENT ($ MILLION)		Q1 2022		Q1 2021		CHANGE
Lease Revenue		658		470		188
Net Loss		(182)		(83)		(99)
Adjusted Net Income/(Loss) (excluding Russia)		80		(83)		163

BALANCE SHEET ($ MILLION)		Q1 2022		FY 2021		CHANGE
Total Available Liquidity		5,372		6,256		(884)
Total Assets		30,521		30,984		(463)
Secured Debt / Total Assets		20%		20%		-
Net Debt to Equity		2.4x		2.4x		-

- Delivered $658 million of lease revenue and generated $320 million of net cash from operating activities in the quarter;

- Adjusted Net Income of $80 million excluding the impact of Russia;

- Ended the quarter with total available liquidity of $5.4 billion, including $477 million of unrestricted cash and $4.9 billion of undrawn debt facilities;

- Raised $300 million of drawn and revolving unsecured debt facilities, bringing total revolving debt capacity to $5.9bn at quarter end;

- Declared and paid a dividend of $12.5 million in respect of FY21 and released $104.7 million of previously withheld dividends to Bohai; and

- Ended the year with a secured debt to total assets ratio of 20%, over $17 billion of unencumbered assets and net leverage of 2.4x.

2022 FIRST QUARTER | FLEET HIGHLIGHTS

- Owned and managed fleet of 592 aircraft at quarter end, with total orders and commitments for 240 fuel-efficient, new technology aircraft;

- Average owned fleet age of 6.0 years with an average remaining lease term of 6.9 years;

- Delivered a total of 6 new aircraft to 4 customers and transitioned 11 aircraft to follow-on lessees;

- Executed commitments for the sale and leaseback of 16 aircraft;

- Sold 3 owned aircraft and entered into letters of intent for the sale of a further 35 owned aircrraft; and

- Ended the first quarter with a total of 142 airline customers operating in 61 countries.

2022 FIRST QUARTER | IMPACT OF RUSSIA

- As disclosed in Q1 update, as of 31 March, Avolon had 10 owned aircraft located in Russia representing less than 1% of Avolon’s portfolio value net of security deposits and maintenance reserves;

- During the quarter, Avolon recognized an impairment of $304 million in respect of our exposure to Russia, reducing the carrying value of the 10 owned aircraft to zero. This impairment is partly offset by the net release of $43 million in other lease associated balances resulting in a $261 million net impact to the income statement; and

- As a result of this impairment, Avolon is reporting a net loss of $182 million for the quarter, and an adjusted net income, excluding the impact of Russia of $80 million for the period.

Dómhnal Slattery, Avolon CEO, commented: “As we reflect on our performance during the quarter, first and foremost our minds are with the people of Ukraine and those – both at home and abroad – that are impacted at this time. We are hopeful for a swift and peaceful end to the conflict.

Given the impact of sanctions, we are recognising an impairment charge of $304 million in the first quarter in relation to our aircraft which were previously on lease in Russia. While we continue to make every effort to recover these assets and are pleased to have repossessed four aircraft, we are recognizing the full impairment this quarter, putting the financial impact of Russian sanctions firmly behind us.

Despite the headwinds of COVID-19 and Russian sanctions, we delivered our strongest quarterly underlying performance since the onset of the pandemic. Our improved year-on-year performance was largely driven by the rapid reopening of borders in Asia and increased flying globally, which supported a further improvement in the financial health of our customers and resulted in increased cash collection rates. This performance re-affirms the inherent strengths of our business and the absolute resilience of the aircraft leasing model, providing us with confidence in the outlook for the remainder of the year.”

ENDS

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 the world’s second largest aircraft leasing business with an owned, managed and committed fleet, as of 31 March 2022 of 832 aircraft.

Website: www.avolon.aero
Twitter: @avolon_aero

View source version on businesswire.com: https://www.businesswire.com/news/home/20220503005683/en/

Ross O’Connor

Head of Capital Markets

roconnor@avolon.aero

T: +353 1 231 5818



Jonathan Neilan

FTI Consulting

avolon@fticonsulting.com

M: +353 86 231 4135

Source: Avolon

FAQ

What was Avolon's lease revenue for Q1 2022?

Avolon's lease revenue for Q1 2022 was $658 million.

How much was Avolon's net loss in Q1 2022?

Avolon reported a net loss of $182 million in Q1 2022.

What is Avolon's adjusted net income excluding the impact of Russia?

Avolon's adjusted net income, excluding the impact of Russia, was $80 million.

What is Avolon's total available liquidity as of Q1 2022?

Avolon's total available liquidity as of Q1 2022 was $5.4 billion.

How many aircraft does Avolon manage as of Q1 2022?

Avolon managed a fleet of 592 aircraft at the end of Q1 2022.