Dublin based lessor SMBC Aviation Capital has announced its results for the half year ended 30th September 2019. Profit before Tax was $200m, an increase of 19% on H1 FY18. $597.4m was generated in lease revenue and other operating income, up 13%. The company now has assets valued in excess of $12.4 billion up 10% from Sep 2018 and comprising of 237 owned aircraft and pre-delivery payments.
In the H1 SMBC took delivery of 17 aircraft, comprising 2 A320s, 1 A321, 13 A320 NEOs and 1 B787 and reported robust demand from airline customers and investors. In the reporting period, 21 letters of intent were signed for 21 aircraft and 16 aircraft were sold with an average age of 7.3 years. There were further signed contracts or Letters of Intent to sell 15 aircraft with an average age of 10.7 years leaving the average fleet now at 4.2 years. The global asset spread was 43.6% Asia, 28.2% EMEA and 28.2% The Americas.
SMBC Aviation Capital has also closed a US$1 billion loan facility with the Japan Bank for International Cooperation. The facility has a 10 year term and will be used to finance a proportion of SMBC’s order book in the coming years.
Commenting on the performance, Peter Barrett, CEO of SMBC Aviation Capital, said: “Successful implementation of our strategy and relentless focus on building long-term customer relationships has resulted in growth of our leasing business and continued interest from trade investors in acquiring our assets. This has allowed us to deliver a strong financial performance in the first half of the year, demonstrating our ability to deliver profitable growth.”
In an interview with Aviation Daily, Mr Barrett also pointed out some of the issues facing the 737 MAX return to service. He anticipates the operational impact of the grounding could continue into 2021. “Our hope is that the aircraft will be upgraded [and approved] relatively soon, but even after that, there’s significant work [for airlines] to get the aircraft back in the air,” Barrett said. “It could be into 2021 before the situation begins to resolve itself properly … Getting schedules back on track could take many months to sort out.”
