BOC Aviation Interim Report 2024 – Building for the Future

Key Facts of the Report

1. Reporting Period: This interim report covers the financial period of the first half of 2024 (1 January 2024 to 30 June 2024).
2. Net Profit: The company reported a net profit after tax (NPAT) of US$460 million, a 76% increase compared to US$262 million in 1H 2023.
3. Revenue: Total revenues and other income reached US$1,174 million, an 11% increase from US$1,061 million in the first half of 2023.
4. Earnings Per Share (EPS): EPS increased to US$0.66, up from US$0.38 in the first half of 2023.
5. Dividend: The Board of Directors declared an interim dividend of US$0.1988 per share, a 76% increase over the previous year’s interim dividend of US$0.1131 per share. This represents 30% of the company’s NPAT.
6. Fleet and Operations:
   • The total fleet includes 680 aircraft, with an average age of 4.9 years and an average remaining lease term of 7.9 years.
   • The company delivered 18 new aircraft and sold 15 aircraft during the first half of 2024.
   • The orderbook consists of 219 aircraft scheduled for delivery up to the end of 2029.
7. Financial Position:
   • Total assets stood at US$24.3 billion, with net assets exceeding US$6 billion for the first time in history.
   • The company maintains strong liquidity with US$532 million in cash and cash equivalents, along with US$4.9 billion in undrawn committed credit facilities.
8. Cash Flow: Operating cash flow net of interest was US$908 million, up 26% compared to the first half of the previous year.
9. Capital Expenditure: The company’s 2024 committed capital expenditure increased to US$2.6 billion.

Special Activities to Improve Profitability

• The company reported a positive impact from the increased value of used aircraft due to industry-wide delivery delays for new aircraft. It leveraged this situation by selling 15 aircraft at a gain of US$56 million.
• BOC Aviation raised US$3.3 billion in new financing facilities, including a US$2.3 billion club loan, to support its business.
• The company executed extension agreements for all aircraft from its owned fleet with lease expiries in 2024 and 2025, ensuring steady income and utilization.

Notable Points for Investors

1. Dividend Payment: The interim dividend increase indicates strong profitability and cash flow.
2. Robust Demand: International passenger traffic growth of over 13% in the first six months of 2024 has driven aircraft utilization to record levels.
3. Stable Financial Health: The company showcases solid liquidity and financial stability, with an increase in cash collections and asset value.
4. Market Conditions: The constrained supply of new aircraft has driven up the value of used aircraft, positively affecting the company’s fleet value.

Investor Recommendations

1. For Current Shareholders:
   • Recommendation: Hold the stock. The company’s strong financial performance, robust cash flow, and increased dividend payout indicate a positive outlook. The orderbook and high aircraft utilization rates support long-term growth prospects.
2. For Potential Investors:
   • Recommendation: Consider buying the stock. The interim report shows a significant increase in revenue, net profit, and dividend payout, supported by a robust aircraft leasing market and strong demand for aircraft. However, potential investors should conduct further research to align this investment with their risk tolerance and investment objectives.

Disclaimer

This summary is based solely on the information contained in the company’s interim report for the first half of 2024. It does not constitute investment advice and investors should consult with a financial advisor before making investment decisions. The company’s future performance may be influenced by market conditions and other unforeseen factors.