Aircraft leasing firm Avation sees profits cut in half
Singapore-headquartered commercial aircraft leasing company, Avation, reported that its half-year profits are half of what they were the previous year, in a year that saw the company sell a repossessed aircraft at a loss.
The company posted its unaudited results for the six months ended 31 December 2023, which saw revenue and other income at $46.3m (£36.6m), down from the $55.7m (£44m) it reported for 2022.
Avation’s operating profit fell by over 50 per cent from $35.4m (£28m) for half year of 2022, to $17.5m (£13.8m). The company reported a loss before tax of $9.6m (£7.6m), whereas it had a profit before tax of $7.1m (£5.6m) for half-year of 2022.
The company said its loss before tax included a $2.9m (£2.2m) loss on sale resulting from aircraft repossession in India. The leasing company repossessed an ATR 72-500 aircraft after an Indian airline was in default. However, it was noted that the aircraft was not in contractual physical return condition and subsequently, it was sold at a loss.
Avation repurchased $8.0m Avation Capital S.A. 8.25%/9.0% Senior PIK Toggle Notes due 2026 in December 2023. It intends to repurchase additional unsecured notes from time to time subject to availability and attractive pricing.
Commenting on the results, executive chairman, Jeff Chatfield noted the company: “expects to conclude a delayed sale of an 11-year-old ATR 72-600 aircraft in the coming weeks at a much higher price. The sale was originally announced in September 2023, but completion has been delayed due to exchange control issues in the buyer’s jurisdiction. The buyer has now fully paid the purchase price for the aircraft and will take delivery shortly.”
“We also expect to commence a new lease of our remaining off-lease ATR 72-600 aircraft in the coming months having signed the associated letter of intent. We expect to conclude the formal lease agreement with a new lessee shortly”, he added.
He stated: “The delivery dates for these aircraft are likely to be pushed back by the manufacturer to the fourth quarter of 2024 due to supply chain issues. Avation will make further announcements regarding placement of these aircraft in due course.”