SMBC Aviation Capital has reported profit before tax of $94.2 million for the half year ended 30 September 2021, compared to $17.3 million in H1 FY20, with performance reflecting the continued improvement in the sector environment.
SMBC Aviation Capital stated that its expects the improving trend to continue on the back of “recovering airline and investor demand for our aircraft, as well as the positive impact of the high quality transactions we have closed over the past 18 months”.
During the half year period, the lessor placed 31 aircraft from Airbus A320 NEO and Boeing 737 MAX order books, sold six aircraft and signed LOIs/contracts for a further 10 aircraft. SMBC Aviation Capital’s total assets were $16.6 billion at 30 September 2021, $1.5 billion higher compared to the prior year period, reflecting increased aircraft acquisition activity.
Some $3bn new technology aircraft of the company’s $4.4 billion new technology transactions since the onset of the crisis, were delivered as of 30 September.
The lessor has also reported strong strategic alignment and support from shareholders, SMBC and Sumitomo Corporation with $11.8 billion of support – comprising $3.1 billion of equity and $8.7 billion debt financing.
In October, SMBC Aviation Capital issued a second $500 million bond of the financial year capitalising on A- ratings and industry leading pricing levels. Average cost of debt of 3.1% reflecting the ability to secure competitively priced debt.
The company has available liquidity of $4.2 billion from diversified funding sources with 100% unencumbered asset base.
“We are continuing to see very positive signs across the market as the recovery strengthens. While challenges remain, we are entering a more normalised operating environment,” said Eithne Manning, acting CFO, SMBC Aviation Capital. “Our H1 profitability reflects the positive trends that have underpinned our improved performance. We are very encouraged as we see growing airline and investor demand for our aircraft. As anticipated, the short haul and low-cost sector is driving the pace of the recovery in several key markets as travel returns and the vaccine roll out continues.
Our ability to deploy capital flexibly, allied with our young, narrow-body focused portfolio, which is comprised of 61% new technology aircraft that are the most fuel efficient, lowest polluting technology on the market, has us very well placed to take advantage of the opportunities being presented by the recovery as we move into the second half of the financial year.”