FLY Leasing had a stellar 2019 with the lessor today reporting net income for the previous 12 months of $225.9 million, up from of $85.7 million for 2018, and Q4 figures of $75.2 million compared to $31.0 million, for the same period in 2018.
The firm’s resulting adjusted return on equity stood at an impressive 36.7% as FLY also reported it had sold ten aircraft for an economic gain of $62.7 million, at a 31% premium to book value, with additional aircraft sales also achieved at above book price.
"FLY is reporting record financial outcomes for the fourth quarter and full year 2019 along with adjusted returns on equity of more than 30% in both the quarter and full year," said Colm Barrington, FLY's chief executive. "At year end, our book value per share was $28.42, which was a 32% increase in the year. Our leverage was reduced to 2.3x at year end, down from 4.0x at the beginning of the year.”
Barrington went on to say that Fly’s aircraft sales in 2019 demonstrated the value in the firm’s balance sheet, and that in the period it had reduced lessee concentration, generated cash and reduced its leverage.
“In the year we sold 35 aircraft with an average age of over 10 years, generating an economic gain of nearly $150 million, which was an 18% premium to book value.”
The chief executive was also bullish over the firm’s outlook, pointing to a strong delivery pipeline of Airbus A320neo family aircraft, and said that the firm was also pursuing other opportunities to acquire aircraft.
“FLY has a strong balance sheet and ample financial capacity to support the acquisition of both our committed deliveries and additional aircraft that we expect to acquire this year,” said Barrington.
During 2019, FLY repurchased 2.0 million shares at an average price of $16.29 per share, for a total cost of $32.8 million meaning as of December 31, 2019, it had 30.9 million shares outstanding and had $50.0 million remaining under its share repurchase authorisation.
At December 31, 2019, FLY’s total assets were $3.7 billion, including investment in flight equipment totalling $3.2 billion while total cash at that date was $338.3 million, of which $285.6 million was unrestricted.
According to the firm’s results statements at the end of 2019, its portfolio consisted of 89 aircraft, six of which were classified as flight equipment held for sale, and seven engines. FLY's aircraft and engines were on lease to 41 airlines in 24 countries.
The average age of FLY’s portfolio, weighted by net book value of each aircraft and engine, was 7.6years, with the average remaining lease term was 5.3 years, also weighted by net book value and, excluding aircraft held for sale, was generating annualised rental revenue of approximately $332 million.