BOC Aviation (2588) H2 2024 earnings summary

Executive summary

• Achieved record net profit after tax of US$924 million in 2024, up 21% year-over-year, with EPS of US$1.33 and all aircraft on lease, utilization above 99%.

• Total revenues and other income rose 4% to US$2.6 billion, driven by strong lease rental income, gains on aircraft sales, and successful Russia-related recoveries.

• Board recommended a record total dividend of US$0.4658 per share, up 21% year-over-year, representing 35% of net profit after tax.

• Maintained 31 years of unbroken profitability, robust portfolio quality, and collection rate exceeding 100%.

• Expanded fleet to 477 owned and managed aircraft and engines, with 709 total aircraft and engines including orderbook.

Financial highlights

• Profit before tax increased 21% to US$1.039 billion; core NPAT (excluding Russia-related write-downs) reached US$924 million.

• Total assets surpassed US$25 billion for the first time, up 4% year-over-year; net assets per share rose 11% to US$9.17.

• Operating cash flow net of interest hit a record US$1.9 billion; total liquidity at US$6.5 billion.

• Gross debt at US$16.6 billion, with a cost of debt of 4.5% per annum; gross debt to equity ratio improved to 2.6x.

• Lease rental income reached US$1.85 billion, with a stable lease rate factor of 10%; finance lease revenue rose to US$270 million.

Outlook and guidance

• 47 aircraft contracted for delivery in 2025, all placed with customers at favorable rates; orderbook of 232 aircraft represents US$12.1 billion in future capex commitments.

• CAPEX guidance for 2025 maintained at similar levels to 2024, targeting around US$4 billion; committed capex pipeline exceeds US$12 billion.

• Expect continued growth in aircraft assets and order book, supported by US$6.5 billion in liquidity.

• Anticipate material upturn in net lease yield as higher-rate leases replace pandemic-era contracts and interest rates potentially decline.

• Industry expects near-record aircraft delivery values in 2025, with strong demand for leased aircraft amid tight supply.