AerCap reports Q1 results and authorizes new share repurchase program

Eleanor Steed
By Eleanor Steed May 10, 2017 09:54

AerCap reports Q1 results and authorizes new share repurchase program

AerCap has reported a net income of $261.2 million for the first quarter of 2017, compared with $223.1 million for the same period in 2016. Diluted earnings per share of $1.48, compared with $1.13 for the same period in 2016. The increase in net income and diluted earnings per share was driven primarily by higher gain on sale of assets and lower maintenance rights expense, partially offset by lower income as a result of the sale of mid-life and older aircraft, which reduced average lease assets. Diluted earnings per share was also favorably impacted by the repurchase of 31.6 million shares for $1.3 billion during the full year 2016 and the first quarter of 2017.

AerCap executed 105 aircraft transactions in the first quarter of 2017, including 22 widebody transactions. The lessor has a 99.7% fleet utilization rate for the first quarter of 2017; while the owned fleet has an average age of 7.3 years average, with 6.5 years average remaining lease term.

During the period, AerCap signed financing transactions for $7.2 billion and has $9.5 billion of available liquidity. Its adjusted debt/equity ratio of 2.7 to 1. AerCap was also upgraded to investment grade rating by Moody’s.

AerCap repurchased 6.6 million shares in the first quarter of 2017 for $293 million and 9.5 million shares year to date through May 5, 2017 for $427 million. The board authorized a new $300 million share repurchase program, which will run through September 30, 2017.

Aengus Kelly, CEO of AerCap, commented: “AerCap delivered another quarter of consistent results. During the first quarter, we generated $1.48 of earnings per share and net income of $261.2 million. The strong operational performance of the business is evidenced in 105 aircraft transactions executed during the quarter, as well as the 99.7% fleet utilization level achieved. We also received our third investment grade rating from Moody’s and completed $7.2 billion of financing transactions, further strengthening AerCap’s balance sheet.”

Basic lease rents were $1,067.1 million for the first quarter of 2017, compared with $1,139.3 million for the same period in 2016. The decrease was primarily due to the sale of mid-life and older aircraft during 2016 and 2017, which reduced average lease assets. Our average lease assets for the first quarter of 2017 were $34.1 billion, compared with $35.5 billion for the same period in 2016.

Maintenance rents and other receipts were $89.9 million for the first quarter of 2017, compared with $150.4 million for the same period in 2016. During the first quarter of 2016, the higher maintenance rents were primarily driven by lease terminations and amendments.

Net gain on sale of assets for the first quarter of 2017 was $47.3 million, relating to 21 aircraft sold and three aircraft reclassified to finance leases, compared with $19.0 million for the same period in 2016, relating to 19 aircraft sold and nine aircraft reclassified to finance leases.

Other income for the first quarter of 2017 was $32.5 million, compared with $9.3 million for the same period in 2016. During the first quarter of 2017, the increase in other income was primarily related to contractual payments from a lease termination agreement with a lessee.

As of March 31, 2017, AerCap’s portfolio consisted of 1,541 aircraft that were owned, on order or managed (including aircraft owned by AerDragon, a non-consolidated joint venture). The average age of our owned fleet as of March 31, 2017 was 7.3 years and the average remaining contracted lease term was 6.5 years.

Eleanor Steed
By Eleanor Steed May 10, 2017 09:54