AeroCentury has reported an increased third-quarter 2019 net loss of $8.2 million compared to a net loss of $4.5 million for the third quarter of 2018.
The $8.2 million in the third quarter is a stark contrast to the minimal loss the group suffered of $78,000 loss in the preceding quarter.
The reason for the huge loss is down to the third quarter 2019 termination of the leases regarding repossession of four aircraft from one of the company’s lessees had a substantial impact on the company’s results, AeroCentury said in a statement.
Further to this, AeroCentury said it recognises maintenance reserves revenue of $17 million with respect to the four aircraft.
The company also recorded impairment losses for the four aircraft of $22.3 million, based on appraised values for three of the aircraft and expected sales proceeds for the fourth aircraft.
Two of the repossessed aircraft were reclassified to held for sale during the third quarter, in which during the period AeroCentury also recorded impairment losses totalling $1 million for two other assets that are held for sale, based on expected sales proceeds.
In the first nine months of 2019, AeroCentury has reported a net loss of $9.6 million, compared to net loss of $4.2 million in the first nine months of 2018.
Total operating expenses increased 374% to $34.5 million from $7.3 million in the preceding quarter, and increased 220% from $10.8 million in the year-ago quarter.