Aircastle reports Fourth Quarter and Full Year 2018 results

Lauren Eldershaw
By Lauren Eldershaw February 12, 2019 12:21

Aircastle reports Fourth Quarter and Full Year 2018 results

Aircastle has reported total revenues of $292.6 million for the fourth quarter of 2018 and $890.4 million for the year. Net income for the four quarter was $103.8 million, or $1.35 per diluted common share, and $247.9 million, or $3.17 per diluted common share, for the year. On an adjusted basis, fourth quarter net income was $109.9 million, or $1.43 per diluted common share, and $257.2 million, or $3.29 per diluted common share, for the year.

Aircastle acquired eighteen narrow-body aircraft during the fourth quarter for $760 million and 39 aircraft in 2018, exclusively narrow-bodies, for $1.4 billion; acquisitions included ten Airbus A320neos. The lessor closed or committed to acquire ten additional narrow-body aircraft in 2019 for $378 million. It sold three aircraft during the fourth quarter and fourteen aircraft for the full year; full year gain on sale of $36.8 million represents 10.9% of net proceeds; 2018 sales included two wide-body aircraft.

Aircastle also declared its 51st consecutive quarterly dividend and returned $157.7 million of capital to shareholders during 2018; $88.7 million in dividends paid and $68.9 million of shares repurchased.

Commenting on the results, Mike Inglese, Aircastle’s CEO, stated, “The successful execution of our active fleet management strategy enabled us to achieve strong financial results. We enhanced and expanded our fleet of in-demand modern aircraft and realized substantial gains from opportunistic sales throughout the year. Furthermore, the achievement of an investment grade credit rating enables us to access attractively priced capital. This places Aircastle in a strong competitive position to expand the Company’s fleet and earnings and to continue to return capital to our shareholders in the form of dividends and opportunistic share repurchases.”

Inglese concluded, “Narrow-body aircraft remain in high demand globally and we continue to benefit from the broad operator base and liquidity these aircraft afford. Solid air traffic growth and heightened investor interest in commercial aircraft as an asset class continue to create new opportunities for an asset manager with technical expertise, operational and financial flexibility and the ability to execute value-added transactions. Looking ahead, we have minimal forward commitments and our primary focus will continue to be on responsible capital stewardship. By maintaining investment discipline with the ability to adapt quickly to changing market conditions, we are positioned to create lasting value for our shareholders.”

In 2018, Aircastle received investment grade credit ratings from Moody’s, Standard and Poor’s and Fitch Ratings. During the third quarter of 2018, the lessor issued $650 million of unsecured senior notes due 2023 bearing a coupon of 4.40%. This was the company’s first senior unsecured note issued with investment grade credit ratings.

Aircastle also increased the size of one of its unsecured revolving credit facilities from $675 million to $800 million, extended the facility maturity by more than two years to June 2022 and lowered the borrowing margin by 75 basis points.

In December 2018, Aircastle entered into a three-year, $250 million unsecured revolving credit facility with a group of banks based in Asia that matures in December 2021. The facility replaced a $135 million Asian bank revolving credit facility that we had previously arranged in 2016. The borrowing margin on this larger facility is 75 basis points lower than the margin on the smaller facility that it replaced.

Lauren Eldershaw
By Lauren Eldershaw February 12, 2019 12:21