Avation PLC TRADING UPDATE AND FULL YEAR RESULTS (2959B)
June 09 2021 - 1:46AM
UK Regulatory
TIDMAVAP
RNS Number : 2959B
Avation PLC
09 June 2021
Via RNS and SGXNET
AVATION PLC
("Avation" or "the Company")
TRADING UPDATE AND FULL YEAR RESULTS
Avation PLC (LSE: AVAP) provides the following trading update
including certain balances (unaudited) as at 31 March 2021.
Fleet
At the date of this announcement, Avation's aircraft fleet
totals 45. Avation's fleet is leased to 19 commercial airlines in
15 countries including seven flag carriers.
As of 31 March 2021, the weighted average age of the aircraft
fleet was 4.8 years, the weighted average remaining lease term was
6.4 years and the total future minimum lease payments receivable
under non-cancellable leases was approximately US$749 million.
Avation had three unencumbered aircraft in the fleet on 31 March
2021.
The Company has a diversified customer base, with the largest
customer representing 27% of unearned revenue and the three largest
customers (airBaltic, VietJet and EVA Air) representing 61% of
unearned revenue. The leases with each of Avation's top three
customers have more than 6 years duration remaining.
Avation expects its customer Philippine Airlines ("PAL") to
enter restructuring in the coming weeks. PAL has proposed to retain
the use of a Boeing 777-300ER aircraft on lease from Avation at a
lower fixed rent applicable post restructure. The impact of this
expected lease rate adjustment on the lease-encumbered value of the
aircraft has been accounted for in the financial results for the
half-year ended 31 December 2020.
As of 31 March 2021, Avation had eight ATR aircraft available
for sale or lease following their redelivery due to Virgin
Australia Holdings Limited's ("Virgin Australia") voluntary
administration. Five of the 13 aircraft originally leased to Virgin
Australia have already been re-marketed. Avation is actively
marketing the remaining eight aircraft and has seen an increase in
interest for these aircraft recently, as airlines restart
operations as the COVID-19 pandemic recedes. Avation's claim for
losses against Virgin Australia is US$73 million. Virgin
Australia's administrators have advised an expected distribution of
9.5-13 cents per dollar for unsecured claims, which are due to be
adjudicated by 17 August 2021.
COVID Trading Update
At the outset of the COVID-19 pandemic, Avation instituted a
programme of support for its airline customers, offering short-term
interest-bearing deferrals for portions of their rent in the form
of loans. The cashflow impact of this support programme has been
mitigated by adjusting the amortisation profiles of related
financings with the agreement of lenders and a US$10.5 million
equity raise in March 2021.
At the current date, Avation has provided support to 14 airline
customers with agreements to defer a total of US$25.9 million of
rent. The impact on cashflow has been mitigated by secured lenders
agreeing to reschedule US$32.7 million of loan amortisation
payments. At today's date, 13 airline customers are being charged
normal monthly rents.
Revenue collection has been challenging due to the severe
disruption to airline cashflows caused by the COVID-19 pandemic.
For the quarter ended 31 March 2021, the Company achieved an
overall cash collection rate of approximately 71% across all its
leases. This represents an increase over the six-month period to 31
December 2020 which saw a cash collection rate of 64%. Revenue and
other income to 31 March 2021 totalled US$91.0 million.
Liquidity and Indebtedness
The Company continues to manage its liquidity position carefully
and aims to match the tenor and cash flow profile of its financing
arrangements with the tenor and cash flow profile of related
leases. As of 31 March 2021, the Company had total cash and bank
balances (including restricted cash) of US$122.4 million, compared
to US$117.6 million as of 31 December 2020.
The Company has seen an improvement in cashflow in the three
month period ended 31 March 2021 compared with that of the first
half to December 2020.
At 31 March 2021, net indebtedness was reduced to US$988.1
million from US$1,039.7 million as at 31 December 2020. Total
Assets equalled $1,347.4 million and total debt equalled $1,177.9
million at 31 March 2021.
Over the coming months, the Company expects to receive a
distribution from its claims against Virgin Australia (as described
above) and is also actively re-marketing a number of aircraft for
sale or lease. Avation expects to manage its liquidity, as it has
done historically, through a combination of aircraft sales and
issuing new secured debt and/or equity. To support customers
Avation may seek further deferrals of loan amortisation payments
where collection for the related aircraft are not sufficient to
cover existing debt service.
Full Year Results
It is expected that the Company will release its full year
results on 30 September 2021.
Executive Chairman, Jeff Chatfield, said:
"The Executive team have worked tirelessly with the airline
customers to manage the collection of revenue as well as
remarketing returned aircraft. Rent collections have improved
compared with the prior half year. The Company has continued to
reduce leverage by lowering net debt by US$51m in the quarter
ending Mar 31, 2021. Management is optimistic that as the pandemic
recedes the Company will be well situated to take advantage of the
recovery in the airline industry."
ENDS -
Enquiries:
Avation PLC - Jeff Chatfield, Executive Chairman +65 6252 2077
Avation welcomes shareholder questions and comments and advises
the email address is: investor@avation.net
Notes to Editors:
Avation PLC is an aircraft leasing company, headquartered in
Singapore, owning and managing a fleet of commercial passenger
aircraft which it leases to airlines around the world. More
information on Avation is available at www.avation.net .
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