Lessor AerCap has reported net income for the first quarter of 2023 (Q1 2023) of $432 million or $1.79 per share, with adjusted net income of $566 million or $2.34 per share.
The Dublin-based business said its full-year-2023 earnings per share guidance was at the "higher end of range" and reported a return on equity of 11% and adjusted return on equity of 14% for Q1 2023, during which it was granted upgrades from Moody's and Fitch to leave it with BBB ratings at the end of the period.
During the quarter it carried out 252 transactions, including 155 lease agreements, 56 purchases and 41 sales, with an 18% margin on gain on sale of assets.
AerCap's basic lease rents were just over $1.5bn, slightly below the $1.55bn for the same period in 2022, and "were impacted by strong cash collections as well as $43 million of lease premium amortisation," the company said
Net gain on sale of assets was $100 million, relating to 35 assets sold for $639 million, compared with $3 million for the same period in 2022, relating to 23 assets sold for $452 million, with the year-on-year difference "primarily due to the volume and composition of asset sales".
Other Q1 2023 income was $42 million, compared with $47 million for the same period in 2022.
Asset impairment charges were $34 million, up from $2 million for the same period in 2022, and were "primarily related to lease terminations and sales transactions and were partially offset by related maintenance revenue".
Leasing expenses were $226 million, up from $208 million, an increase "primarily due to higher maintenance rights asset amortisation".
AerCap reported adjusted debt/equity ratio of 2.56 to 1 as of March 31, and, as previously reported, repurchased 8.8 million AerCap shares from GE for $500 million at ~15% discount to AerCap's book value per share as of December 31, 2022.
The lessor ended the period with a portfolio of 3,500 aircraft, engines and helicopters, which were either owned, on order or managed.
"AerCap's strong earnings and robust cash flows for the first quarter of 2023 reflect the ongoing normalisation of air travel and a return to business as usual for the aviation leasing industry," said chief executive Aengus Kelly.
"We continue to experience strong demand for our aviation assets and our confidence in the future is demonstrated by our new $500 million share repurchase programme." Kelly added.