Alliance Aviation Services (AQZ) investor relations material

Executive summary

• Achieved fifth consecutive year of record flight hours, up 8.7% year-over-year to 113,621 hours, primarily driven by wet lease operations and fleet expansion.

• Revenue grew 19% year-over-year to $769.7m, led by wet lease and charter activity, despite some contract revenue decline due to reduced BHP Nickel West flying and weather disruptions.

• EBITDA rose 16% to $207.3m, but profit before tax fell 5% to $82.1m, reflecting higher operating expenses and finance costs from fleet expansion.

• Returned to paying a fully franked dividend of $0.03 per share, first since FY 2020.

• Leadership changes include appointment of a Joint Managing Director and new board members, with a succession plan and strategic review underway.

Financial highlights

• Record revenue and EBITDA, both driven by increased flight hours and aviation services trading.

• Aviation services revenue surged 274% to $110.0m, reflecting significant asset sales.

• Net debt reduced to $378.1m from $425.5m at December 24, with leverage ratio (post AASB 16) at 2.48x.

• Operating cash flow was strong at $105.6m, up 23.6% year-over-year.

• Depreciation and amortisation increased 26% to $92M, reflecting higher aircraft utilization and fleet mix.

Outlook and guidance

• FY26 outlook remains strong, with growth in wet lease services and stable contract charter operations expected.

• First full year of Qantas wet lease operations in FY26 anticipated to boost revenue and crew utilisation.

• Net debt to EBITDA targeted to decrease to 1.65–1.7x in FY 2026.

• CapEx for engines forecast at $59.8M in FY 2026, primarily for growth rather than maintenance.

• No significant repayments required for a couple of years; strong cash and liquidity position.