CALC Announces 2020 Interim Results
Maintains Stability in Business and Financial Performance Thanks to Highly Selective Clientele and Aircraft Asset
Strengthening Aircraft aAsset Management Expertise to Prepare for Market Recovery
14 Aug 2020
Hong Kong, 14 August 2020 - China Aircraft Leasing Group Holdings Limited ("CALC" or the “Company”, HKSE stock code: 01848; together with subsidiaries, the “Group”), a full value chain aircraft solutions provider for the global aviation industry, is pleased to announce the Group’s results for the six months ended 30 June 2020 (the “Period”).
- Total revenue and other income of the Group for the Period reached HK$1,635.9 million, level to that of the last corresponding period (1H2019: HK$1,675.3 million).
- Profit attributable to shareholders of the Company for the Period grew by 6.1% year-on-year, amounting to HK$331.6 million. Earnings per share were HK$0.491 (1H2019: HK$0.461).
- The Board has resolved to declare an interim dividend of HK$0.20 (1H2019: HK$0.23) per ordinary share.
Maintaining a quality fleet portfolio and clientele
- During the Period, the Group delivered 7 aircraft and disposed of 4 aircraft. As of 30 June 2020, CALC had 137 aircraft in its fleet, including 114 owned and 23 managed aircraft. CALC’s aircraft were on lease to 35 airlines in 15 countries and regions.
- As of 30 June 2020, by the number of aircraft, 93.4% of CALC’s owned and managed fleet (93.9% of its owned fleet) were narrow-body aircraft, a highly liquid asset class and the most popular aircraft type mainly serving domestic routes and short-haul flights, which had been proven to be less impacted by the Covid-19 pandemic.
- By the number of aircraft, 66.4% of CALC’s owned and managed fleet (79.8% of its owned fleet) as of 30 June 2020 were leased to Chinese clients, the market leading global aviation recovery. CALC’s non-Chinese clients are mainly flag-carriers or backed by strong shareholders.
- As of 30 June 2020, CALC’s self-owned fleet had an average age of 5.1 years and an average remaining lease tenor of 8.1 years. With all three leasing agreements originally scheduled to expire in 2020 and 2021 being extended, CALC has been alleviated the pressure for remarketing of aircraft assets in the current volatile market. All aircraft to be delivered in the next 18 months have been mandated.
- CALC’s asset utilization rate of self-owned fleet maintained at 99.1% for the Period. While countries around the world have imposed travel restrictions, CALC has only 33% of its fleet grounded, the lowest amongst the large-scale lessors in the world as compared to an industry average of 63% in May, according to airline intelligence provider ch-aviation.This figure has further decreased to below 12% by the end of July.
Progressing asset-light model
- CALC continued to pursue its asset-light model as part of its long term strategies, aiming at continuously optimizing its fleet portfolio, achieving higher capital efficiency as it expands its business and managing its gearing at reasonable levels. In May 2020, it entered into a strategic cooperative partnership with Moutai Financial Leasing Co., Ltd to invest in lease-attached aircraft portfolio.
- CALC disposed of four aircraft from its portfolio to third parties during the Period. It also signed an agreement with Everbright Financial Leasing Co., Ltd. for the disposal of seven aircraft from its portfolio. The transaction is expected to be completed by the end of 2020.
Deepening full value chain operation
- In March, CALC acquired a 72.82% interest in Aviation Synergy Ltd., which holds a 49% indirect equity interest in PT TransNusa Aviation Mandiri (“TAM”), an Indonesian airline. This transaction further expands the Group’s aircraft downstream business.
- Also in March, FLARI Aircraft Maintenance & Engineering Company Ltd, the Group’s maintenance, repair and overhaul (MRO) joint venture set up with FL Technics obtained certification as an approved EASA Part 145 Maintenance Organization, and permitted to provide line maintenance services for aircraft from the Boeing 737 NG series to Airbus A320 families.
Advancing financing platform development
- Capitalizing on the relative abundance of liquidity in the domestic market in China, CALC completed a RMB300 million short-term debenture issue at a 4% coupon in June, following a RMB1 billion short-term debenture issue at a 3.65% coupon in March.
- In June, CALC obtained approval from the Shanghai Stock Exchange for its asset-backed securities (ABS) issuance programme of RMB5 billion. As the first ABS programme for the aircraft leasing industry in China, it allows multiple issuances within a two-year period without further approval requirements.
- As of 30 June 2020, CALC holds a strong financial position with it’s cash and bank balance standing at HK$3.82 billion and has HK$3.64 billion of undrawn borrowing facilities.
Mr. Zhao Wei, Chairman of CALC, said, "We have been witnessing unprecedented challenges and opportunities since the beginning of 2020. This is the time when constraints of all market participants are being tested. CALC has been able to demonstrate its sound judgements about the situation and continued its advancement in aircraft leasing, aviation financing and other business segments. Its resilience in tackling impact from the pandemic has given China Everbright Limited, as a shareholder, full confidence in its prospects. Looking ahead, we shall continue to nurture a favorable environment for CALC’s development while strengthening our management and control, staying vigilant in identifying and mitigating risks, and enhancing our corporate value by applying professional asset management in the aviation value chain, in order to create our global leading brand in the aircraft industry.”
Mr. Mike Poon, Executive Director and CEO of CALC Group, said, “The pandemic existed as an acid test of our capabilities as an enterprise and our development fundamentals. I am pleased to see CALC, with its premium asset quality, defensive business model, highly-efficient financing capabilities and strong shareholder support, has managed to win trusts and recognitions of ourindustry partners. As markets in China are leading the recovery after the pandemic, CALC has been planning ahead and proactively getting prepared for meeting needs of the market and customers, providing flexible and diversified solutions for global airline customers, and supplying high-quality assets for financial institutions. In the post-Covid era, we shall work seamlessly with everyone in the industry and prosper together.”