Dubai Aerospace Enterprise (DAE) has reported a total revenue of $1.01 billion for nine months to September 30, 2024, up from $989.2 million in the same period last year.
DAE's profit before tax came in at $326.6 million for the first nine months of the year, this is an increase of 57.4% when looking at the comparable period of 2023. Operating cash flow however has decreased from $928.9 million in the first nine months of 2023 to $904.1 million this year.
The company’s adjusted pre-tax profit margin increased to 23.1% during the period up from 21% in 2023. Adjusted pre-tax return on equity also increased to 10.9% from 9.4% in the same period of the previous year.
“We continue to manage our balance sheet prudently with our liquidity and capital adequacy metrics remaining exceptionally strong,” said Firoz Tarapore, chief executive officer of DAE. “We ended the quarter with $4.0 billion in liquidity and a Liquidity Coverage Ratio of 335%. Leverage, as measured by net-debt-to-equity, improved to 2.45x from 2.53x at year-end 2023.”
DAE has a $500 million bond maturing in March 2025, which CFO Sinan Kahya confirmed on the earnings call the company plans to address “in the months ahead before the maturity”.
DAE has continued to see delivery delays from Boeing during the first nine months of the year. The company has previously stated that they expected to receive half of their contracted deliveries from the American manufacturer in 2024. However, due to ongoing strikes, DAE expects to receive only one third of these.
DAE also signed agreements to acquire 23 aircraft for $1.1 billion. These aircraft are made up 91% narrow-body aircraft and 86% next-generation technology aircraft.
Commenting on the portfolio, Tarapore said: “The acquired aircraft portfolios have a weighted average age of 4.4 years, a weighted average remaining lease term of 8.0 years and are on lease to 17 airlines in 13 countries.”
On an earnings call on October 30, 2024, Tarapore commented on the favourable environment over the past nine months with rising lease rentals and residual values for new and used aircraft, with strong demand for passenger and freighter aircraft. He also commented on the elevated trading activity in the sector, sharing that the company had “evaluated nearly 500 aircraft assets for purchase this year” and that alongside the acquisitions made this year, the company’s pipeline it was reviewing was also “very strong”, which he promised further updates on progress over the next few months. He said: “The market for selling assets, regardless of age, is also very strong, driven by ample liquidity that we see out there and sticky inflation, which is giving a nice floor to residual values.”
The number of aircraft acquired during the period totalled 47, including 11 owned aircraft and 36 managed. DAE also sold 47 aircraft, made up of 16 owned aircraft and 31 managed. For the period the company additionally signed a total of 103 lease agreements, extensions and amendments.
Commenting on delivery delays from Boeing, Tarapore said that the company had “more than made up for the shortfall from Boeing in the trading market” but that it would “rather have the new aircraft we have contracted to acquire”. With no clarity on the end of the strike by Boeing workers, he added that DAE had paused further placement activity – which is currently placed to the middle of 2026 – until “we get additional clarity from Boeing on the delivery stream that they will be able to accomplish after the strike ends”.
Tarapore expressed relief that the Russian-Ukraine insurance claims trial had “finally commenced” earlier this month, adding that while it was expected to last for several additional weeks, “we feel very good about the merits of our case” and that in parallel, DAE has “concluded settlement discussions with individual counter parties, and expect to record further recoveries”.
DAE Engineering’s revenue increased by 35% compared to the previous year to $131 million, and profitability increased by 128% to $27.6 million. The development of additional hangar capacity at the company’s facility in Amman, Jordan remains on track with its aim to have an additional five hangar lines in operation by the end of 2024.