China Aircraft Leasing Group Holdings Ltd. · HKEX:1848
China Aircraft Leasing — H1 2024 Earnings Presentation
32 slides from China Aircraft Leasing's earnings presentation, August 2024
Slide 1: China Aircraft Leasing Group 2024 Interim Results
China Aircraft Leasing Group Full value chain aircraft solutions provider 2024 Interim Results August 2024
Slide 2: Contents
Results Highlights Financial Highlights Operation Highlights CONTENTS Industry Outlook
Slide 3: Stable financial and operational performance in 1H2024
1.1 Stable financial and operational performance in 1H2024 2.48 4.41 As at 30 June 2024, in HK$ Steady 2.53 +8.7% bn 132 mn +8.6% bn Stable Revenue Growing revenue Profit to Strong EBITDA Dividend Accumulated DPS1 shareholders For the six months ended 30 June 2024, in HK$ 20 payouts announced 199 +7
Slide 4: Strategic focus: Improving long-term capital management
1.2 Strategic focus: Improving long-term capital management Stable net assets Steady growth of total assets excl. the impact from early redemption of Perp 70 (HK$ bn) 64.0 7 (HK$ bn) 6.3 ~6.01 59.8 6.0 60 50.0 55.3 6 5.4 5.1 5.1 46.4 5 50 43.7 4.0 38.0 41.4 4 3.4 3.8 40 30.9 3.0 30 23.9 3 2.2 18.3 1
Slide 5: Improved operating environment sustained future growth
1.3 Improved operating environment sustained future growth Asset value & Income trend up 25 Expected rate cuts bps in 2024 22 Market share of • First rate cut expected in Sept 2024, 13.4 % 2024-2043 global deliveries 2 the earliest 1H2024 • Interest expenses pressure eased % Global RPK YoY 1 • All o
Slide 6: Contents
Results Highlights Financial Highlights Operation Highlights CONTENTS Industry Outlook
Slide 7: 2024 Interim Results Overview
2.1 2024 Interim Results Overview HK$ mn 1H2024 1H2023 Change Total Revenue 2,528.1 2,326.3 8.7% Profit attributable to shareholders 131.7 201.2 -34.5% EBITDA 2,481.3 2,284.6 8.6% Earnings per share (basic) ( HKD ) 0.177 0.270 -34.4% Interim dividend per share ( HKD ) 0.12 0.15 -20.0% 2024 Interim R
Slide 8: Steady growth in revenue
2.2 Steady growth in revenue HK$ mn 1H2024 1H2023 Change Total lease income 2,222.5 2,056.5 8.1% Finance lease income 300.2 296.6 1.2% (1H2024 : 47 aircraft vs. 1H2023 : 49 aircraft) Operating lease income 1,922.2 1,759.9 9.2% (1H2024: 125 aircraft vs. 1H2023: 113 aircraft) Net income from aircraft
Slide 9: Total operating expenses
2.3 Total operating expenses High interest costs weigh on our profitability, but such impact shall be mitigated as the rate cut cycle begins. HK$ mn 1H2024 1H2023 Change Interest expenses and payments to trust plans (Debts amount to HK$54.8bn in 1H2024, representing 4% increase compared with HK$52.5
Slide 10: Focus on capital structure and cost management
2.4 Focus on capital structure and cost management Speed up portfolio trade while enlarge managed fleet Partnership with strategic and optimize capital structure investors underway 30 aircraft 300+ bps Early redemption Tender offer Projected sale High-cost Interest savings High-cost Novation Capex i
Slide 11: Diversified dual-market financing channels ensure sufficient liquidity
2.5 Diversified dual-market financing channels ensure sufficient liquidity Financing Onshore & offshore fundings HK$ 17 + bn 5.9% RMB 300 mn RMB 1.2 bn Total facilities obtained Avg. financing cost 3-yr Medium Term Notes 5-yr Medium Term Notes (New and renewed, 1H2024) （ 1H2024） (coupon rate 2.75%)
Slide 12: Optimizing debt structure
2.6 Optimizing debt structure Debt Structure Debts management 54.8 27% 100 HK$ bn 2024.07 US$ mn Total debts1 % of RMB debts May increase RMB financing given abundant liquidity Early redemption of Perp. supply and lower funding cost in PRC market Redeem outstanding amount in one go, following the vo
Slide 13: Interest rate and currency risk management
2.7 Interest rate and currency risk management Interest rate risk management Currency risk management • As at June 2024, majority of the debts (HK$54.8 bn) • Effectively control currency risk exposure with have been hedged, among which, hedging arrangements – 24.5 billion floating rate loans were un
Slide 14: Rate cuts expected in 2024
2.8 Rate cuts expected in 2024 • Jun 2024 Fed dot plot implied one rate cut in 2024 (25 bps) and four rate cuts in 2025, i.e. a total of 100 bps. • The Fed announced in July that it will keep its benchmark interest rate unchanged at 5.25% to 5.5%, but left the door open to a possible rate cut in Sep
Slide 15: Contents
Results Highlights Financial Highlights Operation Highlights CONTENTS Industry Outlook
Slide 16: Prudent fleet management
3.1 Prudent fleet management 1H2024 2H2024 12 aircraft 1 engine 17 aircraft 5 aircraft 4 aircraft 9+16 aircraft New deliveries Delivery Signed SPA Portfolio trade Scheduled Projected sales deliveries (Completed)+ (Projected) Steady growth in owned fleet while aim to optimize fleet by active portfoli
Slide 17: Quality fleet assets
3.2 Quality fleet assets (as at 30 June 2024) Maintain a modern fleet portfolio Order OEMs Series Type Owned3 Managed Book 90% Narrowbody models Airbus A320 CEO series NB 80 17 Airbus A320 NEO series NB 54 6 102 Airbus A330 CEO series WB 13 1 Boeing B737 NG series NB 19 2 50% Latest technology aircr
Slide 18: Global expansion of creditworthy clientele
3.3 Global expansion of creditworthy clientele • By number of aircraft leased, overseas customers account for over 30% for the first time. Global expansion • The proportion of overseas customers is expected to keep increasing in the future while we continue to diversify the geographic mix of our cus
Slide 19: Global expansion of creditworthy clientele
3.3 Global expansion of creditworthy clientele Remarketing Orderbook placement • In 1H2024, the Group has successfully achieved its first cooperation • Delivered total of 12 aircraft in 1H2024, of which 7 were with global top-tier airlines through repossession and redelivery as leased to Chinese air
Slide 20: Increasing trading activities unlock multiple benefits
3.4 Increasing trading activities unlock multiple benefits Operational benefits Sale of naked aircraft (4 aircraft) 5+9+16 (1H24) 架 (24/7 to date) (to be completed) Optimizing fleet portfolio Upgrade fleet portfolio, enhance client profile, and diversify geographical mix Lease-attached Signed SPA/LO
Slide 21: Strive to promote China-made aircraft in overseas market
3.5 Strive to promote China-made aircraft in overseas market Order First Debut First Placed 2021/01 Operator 2022/12 Flight 2023/4 2023/6 Mover 2024/5 CALC placed a FIRM ORDER for 30 ARJ21 aircraft and an option for 30 more from COMAC Also signed a tripartite project investment cooperation memorandu
Slide 22: First ARJ21 overseas operator: smooth operation eyes future growth
3.6 First ARJ21 overseas operator: smooth operation eyes future growth As at 30 June 2024 Improving performance - Impressive operational results with more flight destinations coming on the way 130000 passengers 119 % Passenger volume (cumulative figure for overseas operations) Total revenue doubled
Slide 23: Contents
Results Highlights Financial Highlights Operation Highlights CONTENTS Industry Outlook
Slide 24: Global aviation market returns to normal growth
4.1 Global aviation market returns to normal growth 13.4 11.6 82.3 In 1H2024, the global air traffic (measured in Revenue Passenger Kilometers, RPKs) increased by 13.4% yoy, where the international % % % market saw a 17.4% increase while the domestic market grew by 7.4%. Global RPK YoY Global ASK Yo
Slide 25: Global airlines profitability outlook is revised upward again
4.2 Global airlines profitability outlook is revised upward again In June, IATA released the latest “Global Outlook for Air Transport”, revising upwards the profit forecast for airlines in 2024 compared to its predictions made in June and December 2023. Driven by strong demand, the total revenue of
Slide 26: China's civil aviation market is steadily improving
4.3 China's civil aviation market is steadily improving Strong growth in 1H Historical high in sight • In H1, China’s passenger volume reached 350 million, a 23.5% YoY • The volume of passenger flights significantly increased in July, increase and up 9% from 2019 (RPKs at 614.35 billion, up 33.6% Yo
Slide 27: Chinese civil aviation market has broad long-term prospects
4.4 Chinese civil aviation market has broad long-term prospects New deliveries by region from 2024 to 20431 China will become the single largest country for new aircraft deliveries 3.4% 6.1% PRC 9520 11160 22.4% 8.8% Asia-Pacific (excl. PRC) Europe/CIS aircraft aircraft North America 16.7% New deliv
Slide 28: Robust demand for single-aisle aircraft
4.5 Robust demand for single-aisle aircraft Both Airbus and Boeing predict global new deliveries shall be driven by single-aisle in the next 20 years whose market share is expected to further increase. Global fleet by 2043 2024-2043 Global new aircraft demand forecasts 50,170 3.4% 7.8% >70 % >33k ai
Slide 29: Prolonged supply chain snags lead to persistent aircraft shortage
4.6 Prolonged supply chain snags lead to persistent aircraft shortage Supply chain challenge OEM ramp-up stalled OEM delivery delay Aircraft shortage • Engine shortage • Airbus postponed its production target of 75 • Airbus trimmed its full-year delivery • Latest report from Cirium • Labor shortage
Slide 30: Aircraft value and lease rate keep trending up
4.7 Aircraft value and lease rate keep trending up • A significant supply-demand imbalance has led to a persistent aircraft shortage, pushing market values to record highs, particularly for NB models in the fast years where lagging new aircraft deliveries exacerbate such shortage, driving values up
Slide 31: Leasing penetration rate continue to climb
4.8 Leasing penetration rate continue to climb Lessors gaining power with growing market share 52% 24000 50% Number of global passenger aircraft 20000 40% Operating leasing market share (in service + stored) 16000 30% 12000 20% 8000 10% 4000 0 0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 201
Slide 32: 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 d
China Aircraft Leasing Group Holdings — H1 2024 Earnings Presentation on 6ix