SMBC Aviation Reaches $200MM in Pre-Tax Profit in H1/19



SMBC Aviation Capital reported its half-year results as of September 30, 2019. The strong first half performance was driven by increases in lease revenue and trading, resulting in a pre-tax profit of $200 million.

Other highlights from the half year included:

  • $597.4 million lease revenue and other operating income up 13% over H1/2018’s total of $530 million
  • An operating margin of 41%
  • Raised $620 million in third-party funding
  • Aircraft assets valued in excess of $12.4 billion, up 10% from September 2018 ($11.2 billion), comprising of 237 owned aircraft and pre-delivery payments
  • 42.2% of portfolio transitioned to new technology assets with upward trend set to continue
  • Delivered 17 aircraft, including two A320s, one A321, 13 A320 NEOs and one B787
  • Signed LOIs to place 21 aircraft from the company’s order book
  • Sold 16 owned aircraft, with an average age of 7.3 years
  • Signed contracts or letters of intent to sell a further 15 aircraft with an average age of 10.7 years
  • Average age of fleet now 4.2 years
  • A global asset spread 43.6% Asia, 28.2% EMEA, 28.2% The Americas
  • A-/A- ratings from S&P and Fitch
  • $10.6 billion of financial backing from shareholders
  • $5.3 billion of available liquidity

Ongoing cooperation with the company’s shareholders has also continued to reap benefits in selling aircraft into the Japanese market, the largest standalone aircraft investment market globally. Nine aircraft have so far been sold to Japanese investors.

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.

“Our differentiation continues to be the strength of our portfolio alongside the support and collaboration with our shareholder which enables us to provide a diverse product offering to a growing number of customers in the aviation industry.”

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Terry Mulreany
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