NAC suffers $639m loss on Covid-19 impact | News | Airfinance Journal

NAC suffers $639m loss on Covid-19 impact

Nordic Aviation Capital (NAC) recorded a $639 million loss for the year ending 30 June as the Covid-19 pandemic and material impairments of goodwill and other intangible assets impacted on its performance.

Stripping out these impairments, the lessor reported an EBITDA profit of $686 million, from $832.4 million in the previous financial year.

Having experienced its “strongest” ever half-year performance before the pandemic, NAC suffered its “most challenging” last quarter to date on the back of Covid-19.

NAC generated $377 million of cash flow from operations over the year and recorded $490 million in unrestricted cash. It increased lease revenues by 2% to $760 million.

The business recorded total assets of $8.1 billion and total debt of $5.7 billion.

The lessor recorded a 22% increase in placements and extensions compared with 2019, including the execution of 65 lease extensions with existing customers

At financial year-end, NAC says many of customers had entered into short-term rental deferral agreements and/or were in arrears on their payment obligations.

As a result, trade receivables and expected credit losses thereon “increased”. The lessor says the cash collection rate on revenue during the financial year was 77%.

NAC started off 2020 in a strong position and notably raised $859 million in a private placement in February 2020.

But the lessor found itself in a crisis as the pandemic outbreak spread, and has taken a number of measures to weather the storm, including through a $60 million injection of equity by shareholders and entering into a scheme of arrangement, to temporarily halt debt payments to creditors.

“In my 30 years in aviation, 2019/20 has been, without a doubt, the single most challenging year,” says NAC chairman and founder Martin Moller.

“NAC entered the crisis in a strong liquidity position having posted its strongest first-half financial performance in its 30-year history. The company was on track to deliver its 24th consecutive year of increased profitability; however, as Covid-19 began to surface in early 2020, what unfolded was the gravest crisis the industry has ever known,” he adds.

During the year, NAC took delivery of 19 new aircraft and purchased six second-hand aircraft, of which four were previously managed. It also sold 11 aircraft.

As of 30 June 2020, NAC’s fleet included 490 aircraft owned and managed with commitments for another 71 taking the fleet to 561 aircraft.

Transaction SnapshotNordic Aviation Capital | Commercial loan | 06-19 | $450m

Financial Close:
14/06/2019
SPV:
NAC Aviation 33 LTD
Value:
$450.00m USD
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