AeroCentury Corp has reported a fourth quarter 2020 net loss of $14.5 million, or ($9.36) per share, compared to a net loss of $7.0 million, or ($4.55) per share, for the fourth quarter of 2019. For the full year 2020, AeroCentury reported a net loss of $42.2 million, or ($27.33) per share, compared to a net loss of $16.7 million, or ($10.78) per share, for the full year 2019.
During 2020, AeroCentury sold two aircraft that had been leased under operating leases. In addition, two lessees that had leased four aircraft pursuant to sales-type or direct financing leases exercised purchase options for the aircraft. Results for the fourth quarter and the year ended December 31, 2020 included impairment losses on most of the company’s aircraft totalling $11.9 million and $28.8 million. During the same periods, the company recorded bad debt expense of $0.3 million and $1.5 million, respectively, as a result of payment delinquencies and reductions in the appraised value of its two remaining aircraft subject to sales-type leases.
In the third quarter of 2019, AeroCentury terminated the leases for, and repossessed, four aircraft from one of its lessees, which had a “substantial adverse impact” on the company’s 2019 and 2020 results. As a result of those events, AeroCentury recognized maintenance reserves revenue of $17.0 million at the time of repossession, but also recorded impairment losses for the repossessed aircraft of $28.4 million during 2019, based on third-party appraised values or expected sales proceeds. In 2020, the loss of operating lease revenues from those aircraft and an additional $10.9 million of impairment losses also negatively impacted earnings.
Results for the year ended December 31, 2019 also included impairment losses totalling $2.6 million, based on third-party appraised values or expected sales proceeds, for three older turboprop aircraft, a spare engine and an older turboprop aircraft that has been sold in parts.
The results for the year ended December 31, 2019 included a $2.9 million bad debt allowance related to three finance leases secured by three aircraft, one of which aircraft was purchased by the lessee in January 2020. Although AeroCentury recorded a bad debt allowance of $3.9 million during the third quarter of 2019, it reduced its allowance by $1.0 million during the fourth quarter of 2019 as a result of cash received during the quarter and anticipated cash that it received from the lessees in the first quarter of 2020.
AeroCentury’s portfolio currently consists of eight aircraft, spread over four different aircraft types. Six of the aircraft, comprised of four regional jets and two turboprops, are held for lease. Two additional turboprops are financed under sales-type leases. The company also has three turboprop aircraft, two of which are being sold in parts, and three regional jet aircraft that are held for sale. The current customer base includes five customers operating in four countries.