Boc Aviation Limited · HKEX:2588
Boc Aviation — FY2023 Earnings Presentation
33 slides from Boc Aviation's earnings presentation, March 2024
Slide 1: 2023 Final Results Review
2023 FINAL RESULTS REVIEW MARCH 2024
Slide 2: Disclaimer
Disclaimer This presentation contains information about BOC Aviation Limited (“BOC Aviation”), current as at the date hereof or as at such earlier date as may be specified herein. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solic
Slide 3: 2023 Overview
2023 OVERVIEW © BOc AVIATION
Slide 4: 2023: A Year of Record Performance
2023: A Year of Record Performance 2023 2022 2023 vs 2022 Key Indicators US$ million US$ million Variance Total revenues and other income 2,461 2,307 7% Profit before tax 861 29 2,818% Net profit after tax 764 20 3,708% Earnings per share (US$) 1.10 0.03 3,708% 30th year of unbroken profitability 4
Slide 5: Strong Improvement in Net Profit After Tax
Strong Improvement in Net Profit After Tax 217 US$ million 764 527 547 20 1 1 Reported net profit Core net profit after Core net profit after Insurance recovery Reported net profit after tax tax tax (net of tax) after tax 2022 2023 Record performance driven by growth in underlying business and succe
Slide 6: Robust Balance Sheet and Liquidity
Robust Balance Sheet and Liquidity Key Indicators 31 December 2023 31 December 2022 Variance Total assets (US$ billion) 24.2 22.1 10% Total available liquidity (US$ billion) 5.6 5.3 6% Total equity (US$ billion) 5.7 5.2 11% Net assets per share (US$) 8.28 7.50 11% Gross debt to equity (times) 2.9 2.
Slide 7: Highest Dividend Since IPO
Highest Dividend Since IPO US$ 0.3852 0.3541 0.3129 0.2958 0.2831 1 0.2571 0.2659 2 0.2153 0.2721 0.1845 0.1800 0.1920 0.1173 0.1733 0.1770 0.1190 0.1284 0.1388 0.1398 0.1038 0.1098 0.1131 0.0889 0.061 2016 2017 2018 2019 2020 2021 2022 2023 Interim dividend Final dividend Total dividend per share o
Slide 8: Key 2023 Highlights
Key 2023 Highlights 30th year of unbroken profitability Successful management transition Steven Townend succeeded Robert Martin as Chief Record NPAT of US$764 million in 2023 Executive Officer and Managing Director1 Most aircraft deliveries since 2017 Robust liquidity Took delivery of 65 aircraft in
Slide 9: Continued Improvement in Key Metrics
Continued Improvement in Key Metrics Total revenues Profit before tax US$ million US$ million 2,461 861 2,183 2,307 639 29 2021 2022 2023 2021 2022 2023 Operating cash flow net of interest1 Net profit after tax US$ million US$ million 764 1,517 1,643 561 1,327 20 2021 2022 2023 2021 2022 2023 Strong
Slide 10: How We Invest
How We Invest Number of aircraft delivered, purchased and sold Global European Opportunistic PLB Financial Covid-19 Crisis acquisitions in the Crisis down cycle 41 19 45 24 (3) 9 13 16 14 41 22 45 27 16 6 7 4 22 17 12 46 14 31 18 21 43 29 5 58 61 6 5 44 48 50 17 (5) 12 41 27 22 22 31 23 14 17 11 17
Slide 11: Returning to Growth
Returning to Growth Expanding owned fleet Number of owned aircraft1 426 380 392 358 317 2019 2020 2021 2022 2023 Total assets in excess of US$24 billion Total assets (US$ billion) 23.6 23.9 24.2 22.1 19.8 2019 2020 2021 2022 2023 Record asset base achieved in 2023 Note: 1. Includes aircraft on lease
Slide 12: 100% of Orderbook Comprises Latest Technology Aircraft
100% of Orderbook Comprises Latest Technology Aircraft Our aircraft portfolio Aircraft type Owned aircraft Managed aircraft Aircraft on order Total Airbus A220 family 18 0 0 18 Airbus A320CEO family 83 14 0 97 Airbus A320NEO family 122 0 124 246 Airbus A330CEO family 8 1 0 9 Airbus A330NEO family 6
Slide 13: Lease Rental Income Continues to Drive Revenue
Lease Rental Income Continues to Drive Revenue Lease rental income drives total revenues and other income US$ million Interest, fee income and 2,461 others1 2,307 19% 472 64 459 78 Net gain on sale of aircraft 1,784 1,911 3% 2022 2023 Lease rental income 78% Lease rental income Net gain on sale of a
Slide 14: Long-Term Leases A Key Feature of the Company
Long-Term Leases A Key Feature of the Company A long average remaining lease term1 Well-dispersed scheduled lease expiries2 Number of years 400 76.4% 100% 8.3 8.1 8.1 80% 300 Average remaining lease term of 8.1 years 60% 200 40% 100 1.3% 1.2% 3.1% 1.7% 5.6% 10.7% 20% 0 0% 2024 2025 2026 2027 2028 20
Slide 15: Improving Operating Lease Yields
Improving Operating Lease Yields Lease rate factor1 Net lease yield3 9.7% 10.0% 9.2% 7.6% 7.0% 7.1% 2021 2022 2023 Cost of debt2 4.1% 2.9% 3.1% 2021 2022 2023 2021 2022 2023 Notes: 1. Calculated as operating lease rental income divided by average aircraft net book value and multiplied by 100% 2. Cal
Slide 16: Globally Diversified Portfolio
Globally Diversified Portfolio Lease portfolio diversified by customer1 …and diversified by geography2 American Airlines Middle East and Africa 9.2% 10.6% Americas Qatar Airways 26.7% 7.8% Europe JetBlue Airways 16.8% 5.4% IndiGo 4.8% Asia Pacific Chinese Mainland, (excluding Chinese 74 customers Tu
Slide 17: Record High Operating Cash Flow Net of Interest
Record High Operating Cash Flow Net of Interest Collection rate exceeded 100% for the Net cash flow from operating activities second consecutive year US$ million 96.6% 100.8% 101.3% 2,283 2,009 1,804 2021 2022 2023 2021 2022 2023 2023 operating cash flow net of interest1,2 Improving operating cash f
Slide 18: Diverse Funding Channels Utilised in 2023
Diverse Funding Channels Utilised in 2023 Sources and Uses of Cash Sources Uses US$ million 505 (3,640) 808 5,617 1,685 1,650 Undrawn (1,890) 5,225 committed 1,643 credit facilities (560) (201) 392 Cash & 392 cash Cash and Operating 1 Bond Bank loans Asset sales Net RCF Capex Bond Loan Dividends Ava
Slide 19: Flexible Capital Structure
Flexible Capital Structure Outstanding debt amortises over a long term Sources of debt1 US$ billion Loans Loans 13.5 34% 41% 9.7 7.5 4.9 Bonds Bonds 2.0 66% 59% 1.3 2024 2025 2026 2027 2028 2029 and 2022 2023 Loans Bonds beyond Outstanding debt maturity profile Asset and liability profile Floating F
Slide 20: Highest Committed Capex Since IPO
Highest Committed Capex Since IPO Orderbook delivery schedule1 Total committed capex of US$12 billion Number of aircraft US$ billion 149 8.5 9 140 48 2.5 18 27 1.0 30 27 2024 2025 2026 and beyond 2024 2025 2026 and beyond Orderbook PLBs Added another 10 aircraft to 2024’s delivery skyline so far in
Slide 21: Conclusion
Conclusion • Record NPAT of US$764 million in 2023 • 30th year of unbroken profitability • Total dividend of US$0.3852 per share the highest since IPO • Payout ratio of 35% of 2023 reported NPAT • Positive 2024 industry dynamics • Global passenger traffic is at 2019 levels1 • Airline profitability e
Slide 22: Appendices
APPENDICES © BOc AVIATION
Slide 23: BOC Aviation – Who are We?
BOC Aviation – Who are We? Top 5 Bank of China Global aircraft operating lessor1 70% owned by BOC Listed on HKEX A- Investment grade credit ratings from S&P and Fitch HKEX code: 2588 >US$6.2 billion US$24.2 billion Cumulative profits since inception Total assets >US$5.6 billion 684 Available liquidi
Slide 24: The BOC Aviation Journey – 30 Years in 2023
The BOC Aviation Journey – 30 Years in 2023 Ownership Total assets 1993 SALE established with 50:50 joint ownership US$ billion between Singapore Airlines and Boullioun Aviation Services Temasek and GIC each became 14.5% 1997 >0.3 1997 shareholders 2000 >1 2006 Bank of China acquired 100% of SALE on
Slide 25: Our Management Team
Our Management Team Steven Townend Zhang Xiaolu Wu Jianguang Tom Chandler Deng Lei Paul Kent Chief Executive Vice-Chairman & Chief Financial Officer Chief Operating Chief Commercial Chief Commercial Officer & Managing Deputy Managing Officer Officer (Asia Pacific & Officer (Europe, Director Director
Slide 26: Core Competencies - BOC Aviation Track Record
Core Competencies - BOC Aviation Track Record Since inception in 1993: •• Purchasing Purchasing More than 1,100 aircraft purchased totalling more than US$63 billion •• Leasing Leasing More than 1,300 leases executed with 190 airlines in > 60 countries and regions •• Financing 1 Financing More than U
Slide 27: Industry Will Need to Fund US$100 Billion of Aircraft in 2024
Industry Will Need to Fund US$100 Billion of Aircraft in 2024 Passenger aircraft deliveries Passenger aircraft >100 seats1, 2010-2027 2,200 2,067 2,000 Narrowbody Widebody 1,865 1,800 1,682 1,634 1,600 1,516 +12.2% 1,427 1,400 1,214 1,202 1,200 1,134 1,000 950 1,780 800 716 1,588 1,440 600 1,271 1,2
Slide 28: Aircraft Supply Remains Extremely Tight
Aircraft Supply Remains Extremely Tight Passenger aircraft deliveries Passenger aircraft >100 seats1, 2017-2027 2,400 Cuts in production Narrowbody Widebody Pre-COVID forecast rates during Covid 2,100 have removed ~4,400 aircraft 1,800 from available 1,500 aircraft supply ~ 4,400 aircraft not 1,200
Slide 29: Operating Lessors' Share of the Market
Operating Lessors’ Share of the Market Proportion of fleet on operating lease 52% Proportion of fleet on operating lease (%) 25,000 50% 55% 50% 20,000 Number of aircraft 45% 15,000 40% 10,000 35% 30% 5,000 23% 25% 0 20% 1990 1995 2000 2005 2010 2015 2020 2023 Airline owned fleet Operating lease % pr
Slide 30: Fewer Lessors Have Orderbooks
Fewer Lessors Have Orderbooks Number of lessors with orderbook deliveries # of Lessors with backlog/historic deliveries 22 19 18 17 16 15 15 14 13 13 12 12 10 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 More rational competition in the placement market Sources: BOC Aviation anal
Slide 31: Recovery in Aircraft Values
Recovery in Aircraft Values Improving aircraft market values underpinned by robust passenger traffic Source: BOC Aviation analysis, Cirium, updated 18 January 2024 31
Slide 32: Improving Airline Industry Profits
Improving Airline Industry Profits IATA global airline industry net post-tax profit Estimated / Forecast by IATA Economics, US$ billion 40 26 26 23 20 0 -4 -20 -40 IATA initially forecast total -41 NPAT of US$9.8 billion for -60 the global industry in 2023, -80 and more than doubled this -100 foreca
Slide 33: www.bocaviation.com
www.bocaviation.com BOC Aviation Limited 79 Robinson Road #15-01 Singapore 068897 Phone +65 6323 5559 Incorporated in the Republic of Singapore with limited liability Company Registration No. 199307789K