AerCap has reported strong financial results for the third quarter of 2024, buoyed by demand for aircraft and gains on aircraft sales.
The world largest aircraft lessor has reported adjusted net income of $463 million and adjusted earnings per share of $2.41, with a record cashflow for the past twelve months of $5.6bn. On an earnings call on October 30, chief executive Aengus Kelly, said that the positive results reflected “the widespread demand for our assets, the ongoing constraints on OEM deliveries and our continued focus on execution”.
AerCap has increased its full-year 2024 adjusted earnings per share guidance from approximately $10.25 to approximately $10.70, not including any gains on sale for the fourth quarter of 2024
For the third quarter, AerCap booked an unlevered gain-on-sale margin of 27% for assets sold in the period, or 2.0x book value on an equity basis. In the last quarter, the lessor also added a further $500 million share repurchase authorisation in September, taking total authorisations year to date to $1.5 billion, and the company announced a dividend of 25 cents per share for Q3 that will be paid in early December.
"This was another strong quarter for AerCap,” said Kelly in an official statement. “Demand for aircraft remains high, as evidenced by our 99% utilization rate, 92% extension rate for used aircraft and 27% gain-on-sale margin for the quarter. Reflecting our confidence in AerCap's future, we are raising our full year guidance for 2024. We recently announced another $500 million share repurchase program, taking total authorizations for this year to $1.5 billion. These actions are underpinned by our industry leading operating cash flow, which was a record $5.6 billion for the last twelve months.”
During the quarter, AerCap signed financing transactions for approximately $10.5 billion and completed inaugural Sukuk financing in October 2024. The company’s book value per share of $90.66 as of September 30, 2024, represents an increase of approximately 16% from September 30, 2023.
Basic lease rents were $1,605 million for the third quarter of 2024, compared with $1,575 million for the same period in 2023. Basic lease rents for the third quarter of 2024 were negatively impacted by $31 million of lease premium amortization.
Maintenance rents and other receipts were $161 million for the third quarter of 2024, compared with $126 million for the same period in 2023. Maintenance rents for the third quarter of 2024 were negatively impacted by $44 million as a result of maintenance rights assets that were amortized to revenue.
Net gain on sale of assets for the third quarter of 2024 was $102 million, relating to 22 assets sold for $479 million, compared with $130 million for the same period in 2023, relating to 45 assets sold for $682 million. The decrease was primarily due to the volume and composition of asset sales.
As of September 30, 2024, AerCap's portfolio consisted of 3,491 aircraft, engines and helicopters that were owned, on order or managed. The average age of the company's owned aircraft fleet as of September 30, 2024 was 7.4 years (4.7 years for new technology aircraft, 14.7 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.
On the earnings call, Kelly commented again that he expects the continuing production delays to “continue to persist for many years to come” that will benefit values of aircraft and engines and enhance lease rates. He added: “The delivery delays from the aircraft and engine OEM set to continue through the end of this decade, the environment for aircraft leasing remains strong, underpinning the profits and cash flows of our business. This dynamic, and the broad based demand for AerCap’s assets, supported a record operating cash flow performance and a positive outlook for AerCap’s future”.