Willis Lease Finance Corporation (WLFC) has reported second quarter total revenues of $75.0 million and pre-tax profit of $9.7 million. The company reported lower revenue in the second quarter of 2020 than the prior year period due primarily to the impact the COVID-19 pandemic has had on the aviation industry, generally, leading to reduced revenues in the core leasing business. Aggregate lease rent and maintenance reserve revenues were $68.4 million for the second quarter of 2020.
“We are pleased to have maintained profitability in the second quarter, with $9.7 million of reported pre-tax income, given the unprecedented impacts the COVID-19 pandemic has had on our industry,” said Charles F. Willis, Chairman and CEO. “As we have from the beginning of this event, we are working closely with our global customer base to provide tailored lease and service solutions while also maintaining a focus on the strength of our own balance sheet and liquidity."
“At this point, our customers are fighting to survive what essentially has been the disappearance of a flying public,” said Brian R. Hole, President. “We believe we are well-positioned, though, to support the recovery by leveraging our entire platform, from available financing, hundreds of lease engines and aircraft, technical services, aircraft storage and maintenance, surplus material and a multitude of specialised programs, all of which are designed to drive out cost and help our customers return to profitability.”
Total revenue for the second quarter was $75.0 million, a 21.7% decrease when compared to $95.8 million in the same quarter of 2019. Lease rent revenue was $38.5 million in the second quarter of 2020.
Maintenance reserve revenue was $30.0 million in the second quarter of 2020, an increase of $3.5 million, or 13.3%, compared to $26.5 million in the same quarter of 2019. Long term maintenance reserve revenue, which is influenced by end of lease compensation, increased to $27.2 million for the second quarter of 2020, compared to $6.7 million in the comparable prior period. Short term maintenance reserve revenue, which is influenced by lease asset usage, was $2.8 million for the second quarter of 2020 compared to $19.8 million in the comparable prior period.
Spare parts and equipment sales were $2.9 million in the second quarter of 2020, compared to $14.6 million during the same quarter of 2019.
Income before income taxes was $9.7 million in the second quarter of 2020, compared to $21.8 million in the same quarter of 2019 and was $18.3 million in the first half of 2020, compared to $49.6 million in the first half of 2019.
Equipment held for operating lease portfolio was $1.654 billion at June 30, 2020, compared to $1.651 billion at December 31, 2019.
The book value of lease assets Willis Lease owns directly or through its joint ventures was $2.0 billion at June 30, 2020. As of June 30, 2020, the company also managed 402 engines, aircraft and related equipment on behalf of third parties.
Willis Lease maintained $447 million of undrawn revolver capacity at June 30, 2020.
Under the Company’s repurchase plan, the Company repurchased a total of 54,626 shares of common stock in the second quarter of 2020 for $1.5 million.
As of June 30, 2020, the company’s $1.654 billion equipment held for operating lease portfolio consisted of 264 engines, 10 aircraft and 11 other leased assets. As of December 31, 2019, the company’s $1.651 billion equipment held for operating lease portfolio consisted of 263 engines, 10 aircraft and 11 other leased assets.