TIDMDPA
RNS Number : 2401G
DP Aircraft I Limited
02 May 2014
2 May 2014
DP AIRCRAFT I LIMITED (the "Company")
INTERIM MANAGEMENT STATEMENT
This interim management statement relates to the period from 5
July 2013 to the date of publication of this statement. It has been
prepared solely in order to meet the relevant requirements of the
UK Listing Authority's Disclosure and Transparency Rules, and
should not be relied on by Shareholders, or any other party, for
any other purpose.
Overview
DP Aircraft I Limited, a Guernsey based company, was launched in
October 2013 through a US$113m placing. The Company's investment
objective is to obtain income returns and a capital return for its
Shareholders by acquiring, leasing and then, when the Board
considers it is appropriate, selling the aircraft. The Company pays
out dividends on a quarterly basis and targets a yearly
distribution of 9 per cent of the initial placing price of
US$1.00.
Company Information
Ticker DPA
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Company Number 56941
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ISIN Number GG00BBP6HP33
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SEDOL Number BBP6HP3
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Traded Specialist Fund Market
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SFM Admission Date 4 October 2013
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Share Price 102.90p as at 1 May 2014
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Listed Channel Islands Stock Exchange
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CISE Listing Date 4 October 2013
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Country of Incorporation Guernsey
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Current Shares in Issue 113,000,000 Ordinary Shares
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Administrator and Company Secretary Dexion Capital (Guernsey) Limited
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Asset Manager DS Aviation GmbH & Co. KG
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Auditor and Reporting Accountant KPMG
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Corporate Broker Canaccord Genuity Limited
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Aircraft Registration (Date of EI-LNA (28 June 2013)
Delivery) EI-LNB (23 August 2013)
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Manufacturer Serial Number MSN 35304
MSN 35305
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Aircraft Type and Model B787-8
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Lessee Norwegian Air Shuttle ASA
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Website http://www.dpaircraft.com
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Company's activities
On 9 October 2013 the Company, through its wholly-owned
subsidiary DP Aircraft Ireland Limited, completed the purchase of
two Boeing 787-8 aircraft (Manufacturer Serial Number ("MSN") 35304
and MSN 35305) fitted with Rolls Royce engines. DP Aircraft Ireland
Limited has been novated as lessor under the Leases attaching to
each of the aircraft.
The Company bought the Assets with the benefit of pre-negotiated
leases with Norwegian Air Shuttle, each for a term of 12 years from
their respective commencement dates (which were in June and August
of last year). The benefit of these Leases was taken into account
in determining the price paid for the Assets. As at the date of
this statement Norwegian have made all Lease Rental payments on
time and in accordance with the corresponding Leases.
A first interim dividend of 2.25 cents was declared in January
2014 and paid in the first week of February 2014. A second interim
dividend of 2.25 cents was declared on 23 April, such dividend to
be paid on 16 May to shareholders on the Company's share register
as at 2 May.
Aviation Market
The Aviation Market has positive prospects for the longer term.
Air traffic is cyclical but growing and demand for new aircraft is
strong. In their latest market outlooks, both Boeing (Current
Market Outlook 2013-2032) and Airbus (Global Market Forecast
2013-2032) are of the opinion that passenger fleets will double
globally by 2032. Boeing estimates that over half of prospective
aircraft deliveries over that period will contribute to fleet
growth (with the balance representing replacement of old or
obsolete aircraft), and that nearly a quarter of the demand will be
for wide-body aircraft.
The International Air Transport Association ("IATA") expects
that global passenger traffic will increase by 5.8 per cent in
2014. Furthermore it assumes that this year around 3.3 billion
passengers worldwide will travel by commercial airline and that the
airlines will generate a profit of around US$18.7 billion.
Additionally, Airbus believes that the number of passengers will
rise by 131 per cent. over the next 20 years, and that the low-cost
carriers, which still represent the fastest-growing sector, will
increase from 17 to 21 per cent. in respect of global market
share.
As fuel costs have nearly doubled over the last ten years,
accounting for about 30 per cent. of an airline's overall unit
costs, and as competition between carriers increases globally, the
need to stabilise (or preferably to decrease) unit costs
intensifies airlines' demand for new more fuel- and operating
cost-efficient aircraft like the Boeing B787.
The Assets: Boeing B787s
Both of the Company's aircraft were physically inspected at
Stockholm's Arlanda airport in April of this year. The inspection
has been documented through photographs of both the interior and
exterior of the aircraft. Norwegian's Maintenance Operation
Manager, as well as a Boeing Maintenance control engineer, were
present for assistance. A representative of Boeing is always on
site during Norwegian's B787 aircraft downtime at all destinations
on the carrier's long-haul network as part of the Gold Care
Agreement with Boeing. No areas of concern were found and both
aircraft EI-LNA and EI-LNB appear to have been maintained to a very
high standard.
The chart below gives a short overview of the utilisation of
airframe and engines. One of LNB's engines, Engine Serial Number
(ESN) 10130, has recently undergone an upgrade at Rolls Royce's
Derby facilities. The upgrade extends the maintenance intervals of
the engines and will be performed in due course on the remaining
engines of both aircraft as well.
AIRFRAME STATUS EI-LNA EI-LNB
(14 April 2014) (15 April 2014)
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Flight hours 3,521:07 3,117:47
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Cycles 535 373
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Flight hours/Cycles
Ratio 6.58 : 1 8.36 : 1
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ENGINE DATA EI-LNA EI-LNB
(26 March 2014) (26 March 2014)
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Engine Serial Number 10118 10119 10130 10135
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Engine Manufacturer Rolls-Royce Rolls-Royce Rolls-Royce Rolls-Royce
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Engine Type and Model Trent 1000 Trent 1000 Trent 1000 Trent 1000
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Total Time [flight
hours] 3,019:19 3,336:06 334:24 2,770:15
----------------------- ------------ ------------ ------------ ------------
Total Cycles 488 518 38 334
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Norwegian Air Shuttle ASA
Norwegian Air Shuttle - Scandinavia's second largest airline -
has been operating since 1993 and transported more than 20 million
passengers in 2013. Since May 2013 the airline has offered
long-haul services; currently operating with four B787-8s to
Bangkok, New York and Fort Lauderdale, adding Oakland (San
Francisco), Los Angeles and Orlando to its network in May 2014.
Norwegian is successful in attracting passengers originating not
only in Scandinavia, but also in the United States and Asia. Asia,
in particular, is viewed as the fastest growing tourism market for
outbound traffic, offering Norwegian an attractive source for new
business. Besides flying long-haul departing from Scandinavia, the
carrier will start to fly from London-Gatwick to the United States
in July 2014.
Most passengers on Norwegian long-haul flights currently travel
for leisure purposes. However, the airline sees high growth
potential in the business travel market. Over time it is expected
that Norwegian's brand awareness will increase, and as internal
travel policies impose more cost-conscious restrictions it is
likely that the number of business travellers will rise. With its
premium economy class Norwegian is well positioned to attract
business travellers who are no longer able to fly business class
but would still like to receive a premium service (as against the
economy class of a legacy carrier).
The 2013 financial year was the seventh consecutive year in
which the airline made a profit, despite certain events which
materially impacted the results. A drop in bookings due to the
extraordinarily good summer weather in Scandinavia, higher expenses
due to the necessary wet-lease of two Airbus A340s as a result of
the late delivery of the Dreamliner, and start-up investments to
establish long-haul operations and its new base in London Gatwick,
put Norwegian's yields and net profit under pressure, seeing them
decrease by 10 per cent. and 30 per cent. respectively. The carrier
estimates the costs associated with the start-up of the long-haul
business to be around NOK 216 million (around US$35.6 million).
Moreover Norwegian's consolidated financial statements for 2013
show a net profit of NOK 321,564 million (around US$53 million), a
decrease of 30 per cent on 2012. However, the load factor only
decreased by 1 per cent. and EBITDAR and EBIT (operating profit)
increased by 53 per cent. and 140 per cent. respectively. EBIT in
2013 amounted to NOK 969,658 million (around US$160 million).
Norwegian's revenues in 2013 were around 15.6 NOK billion
(around US$2.6 billion), up by 21 per cent. against 2012. Ancillary
revenues, which are important in Norwegian's business strategy,
increased by 6 per cent., while unit costs decreased by 6 per cent
over the same period. The income statement shows an increase in
equity by 13 per cent. and in cash by 25 per cent. based on a YTD
comparison between 2013 and 2012. The equity ratio stood at 18.6
per cent. at the end of 2013.
Norwegian Air Shuttle ASA continues to grow. The carrier
increased its number of passengers in March 2014 by 25 per cent.
compared to the same month in 2013. Furthermore ASK (available seat
kilometres) and RPK (revenue passenger kilometres) increased by 51
per cent. and respectively 52 per cent. in the same period.
The company has been restructured so as to optimise operations
and to emphasise further international growth. The carrier has now
established two fully-owned subsidiaries, each of them operating
with their own air operator's certificate (AOC). Long-haul
destinations will be operated by NAI with an Irish AOC, which was
granted by Ireland in February this year. Gradually all of
Norwegian's B787 aircraft will be operated by this subsidiary under
a sublease from Norwegian Air Shuttle ASA. However, Norwegian will
expand its long-haul network, adding more aircraft so as to operate
a fleet of ten Dreamliners by 2016. The ideal fleet size of the
carrier is 20 to 25 aircraft with a growth rate of four to five
yearly, but due to high market demand for Boeing's Dreamliner,
Norwegian's demand cannot be met.
Material Events since 5 July 2013
October 2013
First Day of Dealings (4 October 2013)
The Board of Directors of DP Aircraft I Limited (the "Company")
was pleased to announce that 113,000,000 of the Company's Ordinary
Preference Shares, which were issued to investors at a price of
US$1.00 per Share pursuant to the Company's recent placing (the
"Placing"), were admitted to trading on the Specialist Fund Market
of the London Stock Exchange and to the Official List of the
Channel Islands Stock Exchange.
Acquisition of Aircraft (10 October 2013)
Further to its announcement of 4 October, the Board of Directors
of DP Aircraft I Limited was pleased to announce that the Company,
through its wholly-owned subsidiary DP Aircraft Ireland Limited, on
9 October 2013 completed the purchase of the two Boeing 787-8
aircraft (MSN 35304 and MSN 35305) detailed in the Company's
prospectus dated 27 September 2013. As further described in the
prospectus, DP Aircraft Ireland Limited was novated as lessor under
the Leases attaching to each of the aircraft.
January 2014
Interim Dividend (16 January 2014)
The Company declared an interim dividend, in respect of the
period ended 31 December 2013, of 2.25 cents per Share, to holders
of Shares on the register at 24 January 2014. The ex-dividend date
was 22 January 2014, with payment expected in the week commencing 3
February 2014.
April 2014
Interim Dividend (23 April 2014)
The Company declared an interim dividend, in respect of the
period starting 1 January 2014 and ended 31 March 2014, of 2.25
cents per Share, to holders of Shares on the register at 2 May
2014. The ex-dividend date will be 30 April 2014, with payment
expected 16 May 2014
Investor Information
The latest available portfolio information can be accessed by
eligible Shareholders via www.dpaircraft.com
Enquiries:
Kellie Blondel
Dexion Capital (Guernsey) Limited
As Company Secretary to DP Aircraft I Limited
Tel: + 44 (0) 1481 743940
This information is provided by RNS
The company news service from the London Stock Exchange
END
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