Dubai Aerospace Enterprise (DAE) has reported total revenue for the nine months ended September 30, 2020 of $984.1 million, down from $1,085.1 million in the prior-year period. Net income for the reporting period fell to $167.3 million from $260.5 million last year.
Pre-tax profit margin was 18% down from 26%; with an 8% pre-tax return on equity down from 11% in 2019.
DAE’s net debt-to-equity is 2.47x, with unsecured debt as a percentage of total debt at 62% up from 57% at end of 2019.
DAE has $2.13bn in available liquidity compared to $2.4bn at end 2019 after repaying a US$430 million bond in August 2020.
The Dubai-based aircraft lessor still has $6.6bn in unencumbered assets, with a fleet utilization level of 98.3%, compared to 100% at the end of 2019. DAE’s investment grade ratings remain from Moody’s (Baa3) and Fitch (BBB-).
“The third quarter of 2020 was characterised by excellent new business origination, strong capitalisation, robust liquidity and continuing efforts to assist our clients in this difficult operating environment,” said Firoz Tarapore, DAE’s Chief Executive Officer. "During Q3 2020, we signed agreements to acquire 31 aircraft with a total value of approximately $1.1 billion, of which approximately $0.2 billion was booked in Q3 2020. The remainder will be booked in Q4 2020 and 2021.
“We continue to work with our customers on a case-by-case basis to provide a range of solutions that create value for both our clients and for DAE. As of September 30, 2020,” added Tarapore.
DAE has offered clients rent deferral packages as well as lease amendments. The lessor confirmed that it has executed deferral relief packages incorporating lease extensions and other lease value enhancements with 21 customers. The total value of deferral relief packages is $155 million or 13% of trailing twelve months lease revenue. Of the total deferrals, $110 million has been incurred and $45 million relates to future periods. $20 million has been repaid and four customers have repaid in full.
DAE has also entered into various lease amendments principally involving near-term relief in exchange for lease extensions and other lease value enhancements with a further 12 customers. The total value of these amendments is $84 million or 7% of trailing twelve months lease revenue.
“During Q3 2020, our cash collection rate increased to 77% from 69% in Q2 2020. For the nine months ended September 30, 2020 our cash collection rate is 80%,” Tarapore concluded.