BOC Aviation has recorded a net profit after tax (NPAT) of $20 million lower than the $561 million in 2021, due to the impact of the Russia-Ukraine conflict. The 2022-NPAT included a write-down of aircraft in Russia, which negatively impacted net profit after tax by $507 million. BOC Aviation reported core net profit after tax at $527 million, excluding the impact of the write-down of aircraft in Russia.
"Our core earnings and core EPS of $527 million and $0.76 respectively were little changed from the $561 million and $0.81 that we reported in 2021, despite losing $90 million in lease rental contributions from the Russian portfolio," commented Robert Martin, managing director and chief executive officer, BOC Aviation.
Interestingly, the company reported net profit after tax of $333 million in the second half (H2) of 2022, up 8% on as compared to $307 million in 2H 2021.
During the year ended December 2022, BOC Aviation recorded an operating cash flow net of interest expense of $1.5 billion up by 14% as the collection rate exceeded 100%. The company ended the year with strong liquidity of $5.3 billion comprising of $392 million in cash and cash equivalents and $4.9 billion in undrawn committed credit facilities as on December 31, 2022
“The recovery of the world’s aviation industry clearly gathered pace in 2022 and supported our 2H 2022 NPAT of $333 million, which not only eclipsed the first half, but also 2H 2021’s earnings,” said Martin. “We made commitments to purchase 147 new aircraft during the year, which will allow us to capitalise on the airline industry’s growth demands and to drive future earnings.”
BOC Aviation recorded total assets worth $22.1bn as of December 31, 2022. The company utilised $1.7bn of debt financing comprising $1.4bn of loans and $30 million bonds.
Commenting on the airline earnings and cash flows, Martin added: "Improving airline earnings and cash flows drove a marked improvement in our collection rate, which rose to 100.8% from 96.6% in 2021 as we received both current rentals and those that were not collected in the prior, pandemic-affected year. This formed the basis for the rise in our operating cash flow net of interest paid, which increased to $1.5 billion from $1.3 billion in 2021."
As of December 31, 2022, BOC Aviation had a total fleet of 633 aircraft owned, managed and on order, with an average aircraft age of 4.4 years and an average remaining lease term of 8.1 years for the 392 owned aircraft fleet, weighted by net book value.
BOC Aviation executed 298 transactions in 2022 including commitment to purchase 147 aircraft, delivery of 34 aircraft, including five deliveries, sale of 18 aircraft and 78 lease commitments.
The company also placed two large orders with Airbus and Boeing for 120 aircraft in total, to close the year with an orderbook of 206 aircraft.