Avolon reported a 9% leasing revenue increase to $2.3bn and adjusted net income of $253 million for 2022, five times as much as the year before.
Cashflow climbed 35% for the year to $253 million, the Dublin-headquartered lessor said, topping what was generated in 2019.
By year-end total available liquidity, taking in $655 million of unrestricted cash and $4.9bn in undrawn debt facilities, was $5.6bn.
“Momentum in global aviation continued throughout 2022 and we worked closely with our customers to support their demand for aircraft. Our financial performance was strong, with a five-fold increase in adjusted net income and 9% growth in lease revenue," said chief executive Andy Cronin.
However the results were minus what Avolon described as "the impact of Russia", or adjusted net income "less the impact of impairment and write-off of lease associated balances in respect of Russia", which left Avolon with a net income of $9 million.
Russia invaded Ukraine in February 2023, leading to international economic sanctions and counter-measures by Moscow that together by mid-year left 10 Avolon aircraft stuck in Russia, costing the lessor $244 million.
"A non-cash impairment charge on aircraft in Russia impacted our reported performance but the underlying financial strength of our business is clear," Cronin said.
Among the year's highlights were the raising of $2.2bn in new debt, which included the lessor's inaugural JOLCO [Japanese Operating Lease with Call Option] financing, leaving it with net debt to equity of 2.3 times, secured debt to assets of 22% and roughly $16bn in unencumbered assets, including an owned and managed fleet of 576 aircraft.
During 2022, Avolon agreed 237 lease deals, made up of new leases, follow-on agreements and extensions, and including a "landmark transaction" with Malaysia Airlines for the financing of 20 A330-900neos valued at over $2bn.
Avolon delivered 35 new aircraft and transitioned the same number to 27 customers while selling 36 aircraft. Of its 146 airline customers in 63 countries, 10 were added during 2022. Another company landmark was reached with the first delivery to IAI [Israel Aerospace Industries] of an A330 for freighter conversion and the placing of an order for 500 electric vertical take-off and landing [eVTOL] aircraft from Vertical Aerospace.
Looking ahead to the rest of 2023, Cronin described the outlook for the year as "positive", with a return to pre-pandemic global air traffic levels expected by mid-year.
"Increasing demand for aircraft to service strong passenger demand, combined with a shortage of new aircraft, is putting upward pressure on lease rates and is positive for long-term residual aircraft values," he said, with Avolon's "low leverage, high levels of liquidity, and our order book of new technology fuel-efficient aircraft" leaving the company poised "to take advantage of attractive opportunities to deploy capital in the year ahead".