Avation PLC Trading Statement (4306G)
July 27 2021 - 01:00AM
UK Regulatory
TIDMAVAP
RNS Number : 4306G
Avation PLC
27 July 2021
Via RNS and SGXNET
AVATION PLC
("Avation" or "the Company")
TRADING UPDATE
Avation PLC (LSE: AVAP) provides the following trading update
(unaudited) as of 30 June 2021.
Commercial Aircraft Fleet
As of 30 June 2021, Avation's commercial aircraft fleet totals
44 aircraft. Avation's fleet is leased to 19 commercial airlines in
15 countries including seven flag carriers. Avation owns 28
long-term purchase rights over ATR72 aircraft.
The weighted average age of the aircraft fleet on 30 June 2021,
was 5.1 years, the weighted average remaining lease term was 6.2
years and the total future minimum lease payments receivable under
non-cancellable leases was approximately US$717 million
(unaudited). Avation owned three unencumbered aircraft on 30 June
2021.
Fleet Valuation Review
COVID-19 has had a materially detrimental impact on aircraft
valuations and the airline industry. Following an impairment review
as of 30 June 2021 in accordance with its accounting policies,
Avation will revalue its fleet resulting in a net diminution in
book value. The diminution in book value is spread across
turboprop, narrowbody and widebody aircraft and results from
applying a conservative approach to the valuation of the fleet. The
net impact of the valuation review will be to reduce the book value
of the fleet by approximately $32 million (unaudited). This will
negatively impact the Company's financial results for the year
ended 30 June 2021. However, the Company is confident that these
impairments will bracket the impact of COVID-19, as evidence in the
marketplace suggests that aircraft valuations have started to
recover. The widespread rollout of vaccination programmes has
resulted in a rapid recovery in regional and domestic air travel.
Avation's view is that, should this trend continue, it may lead to
a future recovery in the airline industry and aircraft
valuations.
Cash Position and Deleveraging
As of 30 June 2021, Avation had total cash and bank balances
(including restricted cash) of US$122.3 million (unaudited),
compared to US$117.6 million as of 31 December 2020. Furthermore,
during the six-month period from 1 January 2021 to 30 June 2021 the
Company has reduced its gross loan balances by $59 million
(unaudited) by repaying aircraft loans.
Results Release
The Company expects to release its full year results on 30
September 2021.
Executive Chairman, Jeff Chatfield, said:
"The Company is optimistic of a return to profits in the future
when the pandemic recedes and as the market recovers. It is our
opinion that aircraft valuations will trend upwards as flying
recovers. The Company both improved its cash position and
significantly lowered its debt during the second half of the
financial year.
" The Company has conducted an impairment review in accordance
with its accounting policies and taken a conservative approach to
valuing its fleet. Passenger traffic is returning rapidly as the
global vaccination rollout provides support for a return to air
travel. Management believes that should the demand for air travel
continue to return to pre-pandemic levels aircraft valuations are
likely to recover in the future. We are confident that impairments
resulting from COVID-19 have been fully captured and conservatively
accounted for, thus enabling the opportunity for the Company to
progress to a post-pandemic return to profit in future."
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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END
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