BOC Aviation (2588) H1 2024 earnings summary

Executive summary

• Achieved record net profit after tax of $460 million for H1 2024, up 76% year-over-year, with EPS of $0.66 and an interim dividend of $0.1988 per share, a 76% increase.

• Operating cash flow net of interest reached $908 million, with a collection rate of 102%.

• Total revenues and other income rose 11% to $1.2 billion; net assets surpassed $6 billion for the first time; total assets at $24.3 billion.

• Interim dividend of $0.1988 per share declared, representing 30% of NPAT.

• Robust demand in aviation leasing, with high aircraft utilisation and strong cash collections from airline customers.

Financial highlights

• Lease rental income was $928 million, down 1.3% year-over-year, while finance lease revenue surged 379.5% to $96 million.

• Net gain on sale of aircraft increased 300% to $56 million, with 15 aircraft sold; gain on sale margin rose to 14.3%.

• Other income rose 26% to $58 million; interest and fee income declined 10% to $36 million.

• Depreciation expense was $399 million, flat year-over-year; finance expenses rose to $358 million due to higher cost of debt (4.6% vs. 3.9%).

• Total costs and expenses dropped 13.1% to $665 million, mainly due to a $170 million write-back of aircraft impairment.

Outlook and guidance

• All aircraft scheduled for delivery in 2024 are placed, with no availability before December 2025; orderbook of 219 aircraft through 2029 underpins future growth.

• Committed capex pipeline of $12 billion, with future aircraft purchase commitments totaling $11.9 billion through 2029.

• Industry expects continued strong airline profitability and record revenues, especially in Asia-Pacific, with IATA forecasting 11% passenger traffic growth for 2024.

• Targeting a third consecutive year of collection rates above 100%.

• Effective tax rate expected to trend toward the global minimum of 15% over time.