In the six months ended 30 June 2020, Dubai Aerospace Enterprise (DAE) reported total revenue of US$672.6 million, compared to H1 revenue in 2019 of US$735.2 million.
Net income was US$121.7 million, compared to H1 income in 2019 of US$197.1 million. The pre-tax profit margin was 20% this half year compared to 29% in the year-ago period. DAE’s net debt-to-equity is 2.51x, compared to 2.64x at the end of 2019.
DAE’s unsecured debt as a percentage of total debt stands at 62%. The lessor has US$2.818bn in liquidity and $6.5bn in unencumbered assets. During the first half of the year, DAE repurchased US$187 million of its bonds and have US$229 million of remaining repurchase authorisation. DAE’s fleet utilisation stands at 99.2%.
“Our financial results for the first half of 2020 were characterised by excellent and abundant liquidity, strengthening balance sheet and lower reported profitability,” said Firoz Tarapore, chief executive officer of DAE, said. “The reported net income in h1 2020 was lower attributable primarily to 23 fewer aircraft in the owned aircraft portfolio, fewer asset sales resulting in lower gains on sale of assets, reduced finance income, and higher provisions for trade receivables offset by lower interest expense.”
Tarapore confirmed that the lessor has granted “meaningful rent deferral solutions” for 34 airlines, which equates to approximately 16% of annual reported revenue. “We are currently evaluating rent deferral requests from an additional 24 airlines totalling aggregate rent of approximately 13% of annual reported revenue. We expect to provide additional assistance to our clients and we also expect arrears to climb,” adds Tarapore.
As of June 30, 2020, we had US$2.8 billion of cash and available liquidity. During the first half of the year, we repurchased US$187 million of our bonds and have US$229 million of remaining repurchase authorization.
Fitch Ratings affirmed DAE’s investment grade unsecured debt rating in early July.
Listen to Firoz Tarapore share his views on the current crisis in a recent podcast with Airline Economics. Listen here. https://www.aviationnews-online.com/airline-economics-aviation-leaders-podcast-series-2020/