AerCap reports 2018 results; begins new share repurchase program

Lauren Eldershaw
By Lauren Eldershaw February 14, 2019 11:17

AerCap reports 2018 results; begins new share repurchase program

AerCap has reported net income of $232.6 million for the fourth quarter of 2018 compared with $266.3 million for the same period in 2017. Net income was $1,015.6 million for the full year 2018, compared with $1,076.2 million for 2017. Diluted earnings per share were $1.62 for the fourth quarter of 2018 and $6.83 for the full year 2018.

AerCap stated that the decrease in net income was primarily driven by a lower maintenance contribution as well as mark-to-market losses on interest rate caps that are used for hedging purposes. The decrease in diluted earnings per share was driven by the same factors as net income, partially offset by the repurchase of 19.2 million shares from October 2017 through December 2018.

Basic lease rents were $1,051.0 million for the fourth quarter of 2018, compared with $1,035.3 million for the same period in 2017. The increase was primarily due to the delivery of new aircraft from October 2017 through December 2018, resulting in a $1.6 billion increase in average lease assets.

Maintenance rents and other receipts were $102.3 million for the fourth quarter of 2018, compared with $162.6 million for the same period in 2017. The decrease was primarily the result of lower maintenance revenue recognized as a result of lease terminations.

Net gain on sale of assets for the fourth quarter of 2018 was $40.8 million, relating to 27 aircraft sold, compared with $48.5 million for the same period in 2017, also relating to 27 aircraft sold. The decrease was primarily due to the composition of asset sales.

Other income for the fourth quarter of 2018 was $25.5 million, compared with $16.6 million for the same period in 2017. The increase was primarily the result of higher inventory sales in the fourth quarter of 2018.

During the fourth quarter, AerCap executed 145 aircraft transactions.

Approximately 95% of lease rents through 2021 are already contracted, confirmed AerCap who added that it has a 99.0% fleet utilization rate for the fourth quarter of 2018.

The lessor made record aircraft purchases of $2.5 billion in the fourth quarter of 2018.

The average age of owned fleet is 6.3 years with a 7.4 years average remaining lease term.

AerCap has $10.0 billion of available liquidity and adjusted debt/equity ratio of 2.86 to 1. It reports a 10% increase in book value per share since December 31, 2017.AerCap repurchased 4.6 million shares in the fourth quarter of 2018 for $235 million, and has announced a new $200 million share repurchase program, which will run through September 30, 2019.

Aengus Kelly, CEO of AerCap, commented: “Q4 was a record quarter for AerCap in terms of transactions demonstrating the unique capabilities of AerCap and the strong demand for our aircraft. The output of these transactions was another robust quarter of profitability with earnings per share of $1.62. AerCap has now bought, sold or leased over 2,000 aircraft in the last five years and generated over $5.1 billion of net income. Our unique knowledge of the industry allied to our core principles on how we run AerCap will continue to drive shareholder value in the coming years.”

Lauren Eldershaw
By Lauren Eldershaw February 14, 2019 11:17