BOC Aviation bolsters cash in first half | News | Airfinance Journal

BOC Aviation bolsters cash in first half

Singapore-based BOC Aviation sold five aircraft and delivered 23 in the six months ended 30 June.

The five sold aircraft were all from the lessor's owned fleet and the 23 aircraft deliveries included one unit acquired by an airline customer on delivery.

In the first half of 2020, BOC Aviation signed 76 lease commitments, with all aircraft scheduled for delivery from its orderbook before 2023 now placed with airline customers.

As of 30 June 2020, BOC Aviation had a portfolio of 571 owned, managed and committed aircraft.

Its owned fleet includes 334 aircraft, with an average age of 3.5 years and an average remaining lease term of 8.5 years, each weighted by net book value, while its managed fleet comprises 40 aircraft.

As at 30 June 2020, utilisation of the owned fleet was 99.8%, with only two single-aisle aircraft off lease for part of the period.

However, the cash collection rate of 88.8% was lower than the lessor's historical rate because of the cash flow pressures that its customers continue to face due to the impact of Covid-19.

BOC Aviation also reshaped its orderbook, committing to purchase 86 incremental aircraft and restructuring its Boeing 737 Max orders, ending the period with an orderbook of 197 aircraft scheduled for delivery through to 31 December 2024.

In the first half of this year, BOC Aviation committed to purchase 66 aircraft in purchase and leaseback (PLB) transactions.

The lessor noted that certain airline customers notified their intention to acquire on delivery a total of 15 of its aircraft on order, one of which is expected to be delivered in the second half of 2020.

Profit before income tax for BOC Aviation for the six months ended 30 June was $354 million, compared with $352 million during the same period of last year.

Revenue for the lessor during the reporting period was $1.98 billion, increasing from $1.7 billion during the first half of 2019.

Cash and cash equivalents at 30 June 2020 were $398 million, increasing from $252 million at 31 December 2019.

During the first half of 2020, BOC Aviation raised more than $2.1 billion in notes and $900 million in loans at below 2019’s average cost of funds in the bank and bond markets.

Bank of China has provided BOC Aviation with a $2 billion committed unsecured revolving credit facility which matures in April 2022, of which $1.7 billion was unutilised as at 30 June 2020.

The cash and undrawn credit facilities of BOC Aviation gave it total available liquidity of $4 billion as at 30 June 2020.

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