BOC Aviation’s Net Profit Exceeds US$200 Million for the First Time
30 Mar 2012
BOC Aviation’s net profit after tax for the financial year ended 31 December 2011 hit US$201 million, 20% higher than the US$168 million achieved last year. Total assets as at 31 December 2011 were US$7.6 billion, up by 14% compared to the prior year while shareholders’ equity rose 15% to US$1.5 billion.
During the year, the Company focused on placement of the 30 A320 aircraft ordered in 2010 with the aircraft type remaining popular with operators. Eight of the A320 were placed with Qantas Airways who also extended leases on another three aircraft, all for operation by its subsidiary Jetstar. Other new A320 customers included Dragonair, South African Airways and TransAsia. In addition, BOC Aviation signed a transaction with Jet Airways for 10 Boeing 737-800 aircraft delivering from late 2012 through to mid-2014. In total, leases for 44 aircraft were signed including four under purchase and leaseback transactions. 68% of the leases were signed with carriers in the Asia Pacific region which experienced relatively stronger growth than other regions. The Company took delivery of 28 aircraft during the year and maintained an average fleet age of four years.
BOC Aviation added Embraer aircraft to its portfolio last year with its first order for 15 E190 aircraft. It also acquired another four aircraft in its first purchase and leaseback transaction for Embraer aircraft with Azul, a new customer.
On the financing side, the Company successfully raised over US$1.7 billion in debt funding of which over 70% was from Asia Pacific financial institutions. This included four series of medium-term notes issued into the Singapore market, which were well received by investors. The medium-term notes programme size was doubled to US$600 million at year end to allow increased issuance in the future.
As at year end 2011, BOC Aviation had a portfolio of 183 aircraft of which 158 were owned and 25 managed, all in service with 47 airlines around the world. The Company had an order book of 71 aircraft and another two on committed purchase and leaseback. As at 31 December 2011, 40 of the 71 aircraft on order have already been placed with lessees.
“Our focus last year was on diversifying product offering, strengthening balance sheet and improving portfolio quality. With rigorous risk management practices in place, no repossessions have been required since 2005,” said Mr. Robert Martin, Managing Director and Chief Executive Officer of BOC Aviation. Mr. Martin said 2011 marked the Company’s first five years of operation under Bank of China ownership and “the Company has achieved cumulative net profit after tax of US$700 million since it was acquired by Bank of China on 15 December 2006.” He added that BOC Aviation’s balance sheet has grown 2.5 times compared to 2006 whilst debt-to-equity ratio remains conservative at 3.5:1.
BOC Aviation is 100% owned by Bank of China, one of the largest banks in the world.
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