China Aircraft Leasing Group Holdings Ltd. · HKEX:1848
China Aircraft Leasing — H1 2023 Earnings Presentation
28 slides from China Aircraft Leasing's earnings presentation, Aug 22, 2023
Slide 1: China Aircraft Leasing Group 2023 Interim Results
China Aircraft Leasing Group Full value chain aircraft solutions provider 2023 Interim Results 2023.08
Slide 2: Contents
01 Results Highlights 02 Financial Highlights 03 Operation Highlights Contents 04 Industry Outlook
Slide 3: 1.1 Solid 1H2023 financial and operational performance
1.1 Solid 1H2023 financial and operational performance For the six months ended 30 June 2023, in HK$ As of 30 June 2023 As of 30 June 2023 2.33 + 23.0% bn 200 mn 189 + 13 aircraft 213 aircraft 42 +4 20 +3 Strong revenue Improved profit to Fleet size On backlog2 Airline clients Countries and sharehol
Slide 4: 1.2 Strong balance sheet and stable capital structure
1.2 Strong balance sheet and stable capital structure Steady growth of total assets Stable net assets 70 (HK$ bn) 63.19 7 (HK$ bn) 6.26 6.26 6.02 60 55.33 6 5.42 50.03 46.39 50 43.65 5 37.99 41.43 3.78 3.97 40 30.90 4 3.43 3.04 30 23.95 3 2.21 18.31 1.78 20 12.83 2 6.89 0.69 0.96 10 3.34 1 0.23 0 0
Slide 5: 1.3 On the way towards Investment Grade
1.3 On the way towards INVESTMENT GRADE HIGHEST credit ratings in PRC 2023 International ratings Improve operational and Int’l rating upgrade to (May 2023) ((June/July 2023) financial strengths drive sustainable growth Target int’l rating AAA(Stable) Ba1(Stable) • Optimize fleet portfolio INVESTMENT
Slide 6: 1.4 Strive to promote China-made aircraft in overseas market
1.4 Strive to promote China-made aircraft in overseas market After years of efforts for the successful delivery of ARJ21 to its first overseas carrier, CALC has further set up special project team for China-made aircraft related businesses and affairs to strengthen strategic cooperations with COMAC
Slide 7: Contents
01 Results Highlights 02 Financial Highlights 03 Operation Highlights Contents 04 Industry Outlook
Slide 8: 2.1 1H2023 Results Overview
2.1 1H2023 Results Overview HK$ mn 1H2023 1H2022 Change Total revenue 2,326.3 1,890.8 23.0% Profit/(Loss) for the period 306.9 (70.4) NA Profit/(Loss) attributable to shareholders 201.2 (130.2) NA EBITDA 2,284.6 1,379.5 65.6% Basic EPS (HK$) 0.270 (0.175) NA Interim dividend per share (HK$) 0.15 0.1
Slide 9: 2.2 Steady revenue growth
2.2 Steady revenue growth HK$ mn 1H2023 1H2022 Change Total lease income 2,056.5 1,653.8 24.3% Finance lease income 296.6 284.4 4.3% (1H2023: 49 aircraft vs. 1H2023: 49 aircraft) Operating lease income 1,759.9 1,369.4 28.5% (1H2023: 113 aircraft vs. 1H2022: 89 aircraft) Net income from aircraft tran
Slide 10: 2.3 Total operating expenses
2.3 Total operating expenses HK$ mn 1H2023 1H2022 Change Interest expenses (Total interest-bearing debts at 30 June 2023 reached HK$52.5 billion, an increase of 19% from HK$44.2 billion at 30 June 2022; Avg. 3-month (1,075.9) (757.9) 42.0% LIBOR 1H2023: 5.55% vs 1H2022: 1.18%, up 437 bps） Depreciati
Slide 11: 2.4 Diversified financing channels ensure sufficient liquidity
2.4 Diversified financing channels ensure sufficient liquidity Interest-bearing debts totaled HK$52.5 bn % of RMB debts = 22.3%, may further May consider increase financing in RMB given its relatively • New/renewed facilities obtained in 1H2023 > 14.5 HK$ bn • Actively exploring green financing as w
Slide 12: 2.5 Interest rate and exchange rate risk management
2.5 Interest rate and exchange rate risk management Interest rate risk management Foreign exchange risk management • Majority of the interest-bearing debt (HK$52.5 bn) • Effectively control currency risk exposure with hedging arrangements have been hedged. Only HK$24 bn floating rate loans were unhe
Slide 13: Contents
01 Results Highlights 02 Financial Highlights 03 Operation Highlights Contents 04 Industry Outlook
Slide 14: 3.1 Fleet management
3.1 Fleet management 1H2023 2H2023 13 aircraft 1 aircraft 26 aircraft 8 aircraft 10 aircraft 21 aircraft New deliveries Portfolio trade Signed LOI for Scheduled Projected LOI or LA signed/in leasing deliveries disposals progress for P-trade 300 Steady growth in owned fleet while target to expand man
Slide 15: 3.2 Flexible strategy to optimize fleet portfolio
3.2 Flexible strategy to optimize fleet portfolio Narrowbody-dominated fleet (as of 30 June 2023) Quality & sustainable growth Long-standing partnership with OEMs OEMs Series Type Owned1 Managed Orderbook to support more flexible fleet strategy A320 CEO family NB 85 17 - Large orderbook dominated by
Slide 16: 3.3 Steady operations outperforming peers
3.3 Steady operations outperforming peers Best utilization rate1 Double-digit rental yield and good rent collection 100.0% 100.0% 100.0% 99.1% 99.1% 99.0% 11.8 % 100.6 % Adj. rental yield2 Rent collection ratio3 2018 2019 2020 2021 2022 1H2023 Highly liquid narrowbody-dominant fleet with stable valu
Slide 17: 3.4 Global footprint with creditworthy clientele
3.4 Global footprint with creditworthy clientele 42 • China is our home market • We would continue to actively expand our global footprint with top-tier clients in the future. • Repossessed aircraft have been remarketed to flag carriers/top-tier airlines such as Royal airlines Jordanian, LATAM, etc.
Slide 18: 3.5 Proven track record in portfolio trading and management
3.5 Proven track record in portfolio trading and management Active player in portfolio trade Aircraft trading benefits • Provide additional revenue source 110 + aircraft HK$ 40 + bn • Open up more business opportunities with customers • Improved capital efficiency, higher ROE and lower Total trading
Slide 19: 3.6 Associated company CAAM business updates
3.6 Associated company CAAM business updates One-stop old aircraft sustainability solutions provider Fully licensed • Our MRO joint venture FL ARI obtained the base maintenance license by CAAC • Naked aircraft/airframe sales Aircraft Engine • Naked engine sales for 3C-check (36000FH/24000FC/108MO) o
Slide 20: Contents
01 Results Highlights 02 Financial Highlights 03 Operation Highlights Contents 04 Industry Outlook
Slide 21: 4.1 Strong recovery trend persisted in global traffic YTD, led by APAC
4.1 Strong recovery trend persisted in global traffic YTD, led by APAC • In 1H2023, total global air traffic (measured in revenue passenger kilometers or RPKs) increased by 47.2% yoy. Passenger traffic in June 2023 rose 31.0% compared to June 2022. Globally, traffic is now at 94.2% of pre-COVID leve
Slide 22: 4.2 Robust demand drives rapid growth in narrowbody aircraft
4.2 Robust demand drives rapid growth in narrowbody aircraft Single-aisle surpass 2019 level Strong upcoming demand for narrowbody • Measured in available seat miles (ASMs), single-aisle fleet have fully • Airbus predicts in the "Global Market Forecast 2023" that the recovered to above 2019 level wh
Slide 23: 4.3 Aircraft value and lease rate keep trending up
4.3 Aircraft value and lease rate keep trending up • The rapid growth of air travel amid ongoing supply chain issues, coupled with high inflation and interest rates, had been and is expected to continue pushing up lease rates. It is generally expected that the narrow-body shortage would likely persi
Slide 24: 4.4 Upcoming substantial fleet retirement and replacement
4.4 Upcoming substantial fleet retirement and replacement • Oliver Wyman previously suggested the average age of commercial aircraft would decline dramatically over the next decade as airlines renew their fleets with more fuel-efficient models, which would drive average annual retirements to increas
Slide 25: 4.5 Air traffic speed up pace of recovery in China YTD
4.5 Air traffic speed up pace of recovery in China YTD • CAAC data showed that in 1H2023, total air transport turnover, passenger number, cargo and mail volume reached 53.13 billion ton-kilometers, 284 million persons, 3.276 million tons, respectively, representing 84.6%, 88.2%, and 93.1% of their c
Slide 26: 4.6 China to be the world's largest aviation market with policy support
4.6 China to be the world’s largest aviation market with policy support The 14th Five-Year Plan for Civil Aviation: Huge demand for passenger aircraft and freighters expected Year 2023-2025 would be a “growth and release” period along with the rapid growth of China’s civil aviation • During the 14th
Slide 27: 4.7 Lessors gaining power with growing market share
4.7 Lessors gaining power with growing market share • Leasing penetration rate had continued to rise over the past years, and further pushed up to over 50% during the outbreak of Covid-19, manifesting the growing power of lessors in aviation industry. • Report from FORTUNE BUSINESS INSIGHTS shows th
Slide 28: THANKS
THANKS 【Disclaimer】 This document may contain "forward-looking statements“, including, but not limited to, statements regarding strategic initiatives and execution statements relating to the Company's future business development and economic performance. While these forward-looking statements repres
China Aircraft Leasing Group Holdings — H1 2023 Earnings Presentation on 6ix