CALC reports first half 2017 results

Eleanor Steed
By Eleanor Steed August 25, 2017 09:50

CALC reports first half 2017 results

During the six months to June 30, 2017, CALC’s revenue and other income increased by 22.5% to HK$1,258.0 million on the back of continued expansion of the aircraft leasing business and successful implementation of its globalization strategy. Net profit grew 3.6% to HK$248.7 million, while basic earnings per share was HK$0.37. Total assets increased by 10.1% to HK$34,028.7 million. CALC’s gearing ratio dropped by 0.4 percentage points to 83.2%. The lessor completed the disposal of finance lease receivables for 10 aircraft and declared an interim dividend of HK$0.18 per share, an increase of 28.6% with dividend payout ratio of 49%.

During the reporting period, CALC delivered nine aircraft in first half of 2017 to new customers, of which six were delivered to overseas airlines, fleet size grew to 90 aircraft as at 30 June 2017. CALC expanded and diversified its current client base to 20 airlines across eight countries and regions, and placed its first purchase order with Boeing for 50 new 737 MAX series aircraft, scheduled for delivery in stages up to 2023. The Group expects to deliver 20 aircraft in the second half of 2017 and to expand its fleet to around 110 aircraft by the end of 2017.

CALC took advantage of the low interest rate environment and issued its third US dollar senior unsecured bond, comprising US$300 million five-year and US$200 million seven-year bonds with coupon rates of 4.7% and 5.5% respectively. The lessor repurchased convertible bonds in an aggregate principal amount of HK$155.2 million from China Everbright Financial Investments Limited, helping to shore up its balance sheet. The Group also entered into interest rate swaps for long-term aircraft loans with US dollar floating interest rate for another 11 aircraft to mitigate risk of interest rate fluctuations.
With 48% of its equity interest held by CALC, Aircraft Recycling International Limited (ARI) currently has 10 aircraft in its fleet, among which four (one of which is under a joint venture) were leased to Sichuan Airlines while the other six were under negotiation for trade-out.

CALC states that the construction of its aircraft recycling facility in Harbin is “progressing well” and is expected to be completed by the fourth quarter of 2017.

Also during this period, ARI completed the acquisition of 100% equity interest in Universal Asset Management.

Chen Shuang, Chairman of CALC, said: “CALC’s strong performance in the first half of 2017 again demonstrated its strong growth momentum. With its successful execution of its globalization strategy and fleet expansion plan, together with the continued expansion and diversification of its clientele, CALC is working towards being a full value-chain aircraft solutions provider for global airlines. We are well positioned to capture significant opportunities globally.”

Mike POON, Chief Executive Officer of CALC, added: “Leveraging on our competitive advantages built over a decade, and as a key global aviation industry player, we continued to expand our fleet in the first half of this year and achieved a significant step forward by adding the Boeing 737 MAX series aircraft into our fleet for the near-term future. Our track record of effective marketing and efficient placements showcases our capability to provide full life-cycle aircraft solutions as a means to enlarge our international client base globally in the dynamic market, generating added-value for our customers and shareholders.”

“As Hong Kong is forging ahead with its initiatives to develop into an international aircraft leasing hub and aviation finance center, we wish to continue our active role in the aviation industry and work with the Hong Kong government by leveraging on our expertise in global financing, insights as well as our previous experience in promoting Tianjin as one of China’s major leasing hubs. Currently, we are actively planning to extend our leasing platform to Hong Kong as a first mover in support of the government’s initiative.”

Eleanor Steed
By Eleanor Steed August 25, 2017 09:50