Boc Aviation Limited · HKEX:2588
Boc Aviation — H1 2024 Earnings Presentation
33 slides from Boc Aviation's earnings presentation, August 2024
Slide 1: 2024 Interim Results Review
2024 INTERIM RESULTS REVIEW AUGUST 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: 1H 2024 Overview
1H 2024 OVERVIEW © BOc AVIATION
Slide 4: A Record 1H 2024
A Record 1H 2024 1H 2024 1H 2023 Change US$ million US$ million Total revenues and other 1,174 1,061 11% income Profit before tax 509 295 72% Net profit after tax 460 262 76% Earnings per share (US$) 0.66 0.38 76% Strong growth across all major line items 4
Slide 5: Strong Improvement in Net Profit After Tax
Strong Improvement in Net Profit After Tax US$ million +9% 176 460 262 284 1 1 Core net profit after tax Core net profit after tax Asset recovery Reported net profit after (net of tax) tax 1H 2023 1H 2024 Robust growth in core business and continued success in Russia-related recoveries Note: 1. Excl
Slide 6: Record Interim Dividend
Record Interim Dividend US$ 0.1988 0.1388 0.1398 0.1284 0.1098 0.1131 0.1038 0.0889 0.061 1H 2016 2017 2018 2019 2020 2021 2022 2023 2024 2024 interim dividend per share of US$0.1988, 76% higher than 2023 6
Slide 7: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity 30 Jun 2024 31 Dec 2023 Change Total assets (US$ billion) 24.3 24.2 Stable Total liquidity (US$ billion) 5.5 5.6 Stable Total equity (US$ billion) 6.1 5.7 5% Net assets per share (US$) 8.73 8.28 5% Gross debt to equity (times) 2.7 2.9 0.2x Total equity exceeded US$
Slide 8: Key 1H 2024 Highlights
Key 1H 2024 Highlights Record Robust High Strong interim asset liquidity pipeline profits quality Net profit after tax of Collection rate of Record cash flow of Pipeline capex of US$460m 102% US$908m1 US$12bn A Top 50 Fortune Southeast Asia Company2 Notes: 1. Operating cash flow net of interest 2. B
Slide 9: Solid Fundamentals
Solid Fundamentals Core revenues1 Core profit before tax1 US$ million US$ million 1,061 1,157 323 295 1H 2023 1H 2024 1H 2023 1H 2024 Core operating cash flow net of interest1,2 Core net profit after tax1 US$ million US$ million 899 284 262 721 1H 2023 1H 2024 1H 2023 1H 2024 Sustaining 2023’s stron
Slide 10: How We Invest
How We Invest Number of aircraft delivered, purchased and sold Global Opportunistic PLB European Covid-19 Financial acquisitions in the Crisis 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 3 6 5 44 48 50 17 12 41 27 22 22 31 23 12 14 17 11 17
Slide 11: Continued Investments in Aircraft
Continued Investments in Aircraft Owned fleet of close to 430 aircraft Number of owned aircraft1 426 429 380 392 358 2020 2021 2022 2023 Jun 2024 Steady growth in assets Total assets (US$ billion) 23.6 23.9 24.2 24.3 22.1 2020 2021 2022 2023 Jun 2024 Aircraft assets rose 8% year-on-year1 Note: 1. By
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 21 0 2 23 Airbus A320CEO family 71 13 0 84 Airbus A320NEO family 130 0 124 254 Airbus A330CEO family 8 1 0 9 Airbus A330NEO family 6
Slide 13: Lease Rental Income Drives Revenue
Lease Rental Income Drives Revenue Lease rental income drives total revenues and other income US$ million Net gain on sale of aircraft 1,174 5% 1,061 56 Interest, fee income and 107 14 190 others 16% Lease rental income 940 928 79% Total revenues 1H 2023 1H 2024 Lease rental income Net gain on sale
Slide 14: Higher Gains on Aircraft Sales Create Additional Business Value
Higher Gains on Aircraft Sales Create Additional Business Value Average appraised values > aircraft NBV Gains on aircraft sales margin Covid 14% 14% 11% 8% 5% 5% 2% 2022 2023 1H 2024 -1% Jun 22 Dec 22 Jun 23 Dec 23 Jun 24 Gains on sale are above long-run average of 9% 14
Slide 15: 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 78.4% 100% 300 Average remaining lease term of 7.9 years 80% 8.1 8.1 7.9 200 60% 5.5% 11.0% 40% 100 0.5% 0.6% 2.5% 1.5% 20% 0 0% 2024 2025 2026 2027 2028 20
Slide 16: Stable Net Lease Yield Despite Rising Cost of Debt
Stable Net Lease Yield Despite Rising Cost of Debt Operating lease rate factor1 Net operating lease yield3 9.8% 9.8% Stable 7.0% 7.0% 1H 2023 1H 2024 Cost of debt2 Stable 4.6% 3.9% 1H 2023 1H 2024 1H 2023 1H 2024 Notes: 1. Calculated as annualised operating lease rental income divided by the average
Slide 17: Global Lessor With a Highly Diversified Portfolio
Global Lessor With a Highly Diversified Portfolio Lease portfolio diversified by customer1 …and diversified by geography1 American Airlines Middle East and Africa 9.5% 10.5% Qatar Airways Americas 7.6% 28.4% JetBlue Airways Europe 6.1% 17.0% IndiGo Others 5.5% 66.9% Asia Pacific (excluding Turkish A
Slide 18: A New Milestone in Cash Flow Generation
A New Milestone in Cash Flow Generation Net cash flow from operating activities Collection rate remained above 100% US$ million 101.8% 102.0% 1,290 96.9% 946 1,024 1H 2022 1H 2023 1H 2024 1H 2022 1H 2023 1H 2024 1H 2024 operating cash flow net of interest1 Improving operating cash flow net of intere
Slide 19: Diverse Funding Channels Utilised in 1H 2024
Diverse Funding Channels Utilised in 1H 2024 Sources and Uses of Cash US$ million Sources Uses 5,477 448 215 (1,500) 1,265 Undrawn committed (1,248) 4,945 1,000 credit facilities 908 (754) (194) 392 Cash & 532 cash Cash and Operating 1 Bond Bank loans Asset sales RCF Bond Loan Capex Dividends Availa
Slide 20: Flexible Capital Structure
Flexible Capital Structure Sources of debt Asset and liability profile 41% 44% Floating rate Floating assets rate 59% 56% liabilities 7% 20% 1 2023 1H 2024 Bonds Loans Fixed rate Outstanding debt maturity profile 48% Fixed rate 91% US$ billion 2.6 2.7 2.9 2.8 2.7 Others 7% 1.8 0.9 Equity 25% Others
Slide 21: Investing For The Future
Investing For The Future Orderbook delivery schedule1 Total committed capex of US$12 billion Number of aircraft US$ billion 155 9 4.0 146 8.6 55 17 27 20 3 1.9 18 24 0.8 1.4 2024 2025 2026 and beyond 2024 2025 2026 and beyond 2 Capex during 1H 2024 Committed capex Delivered Orderbook Purchase and le
Slide 22: Conclusion
Conclusion US$460m US$138m US$908m US$12bn US$2.5bn Record NPAT Record interim Record cash flow1 Robust capex Aircraft value dividend pipeline premium to NBV2 A truly global aircraft leasing company All data as at 30 June 2024 Notes: 1. Operating cash flow net of interest 2. Average appraised aircra
Slide 23: Appendices
APPENDICES © BOc AVIATION
Slide 24: The BOC Aviation Journey – 31 Years in 2024
The BOC Aviation Journey – 31 Years in 2024 Ownership Total assets 1993 SALE established with 50:50 joint ownership US$ 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: BOC Aviation – Who are We?
BOC Aviation – Who are We? Bank of China Listed on HKEX Ownership 70% owned by BOC (2588 HK) Top 5 93 customers in 47 countries Market position Global aircraft operating lessor1 and regions In our 31st year >US$6.7 billion Profit track record Of unbroken profitability Cumulative profits since incept
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 1,400 leases executed with > 190 airlines in > 60 countries and regions •• Financing 1 Financing US$45 bil
Slide 27: Our Management Team
Our Management Team Steven Townend Wu Jianguang Tom Chandler Deng Lei Paul Kent Chief Executive Officer & Chief Financial Officer Chief Operating Officer Chief Commercial Officer Chief Commercial Officer Managing Director (Asia Pacific & the Middle (Europe, Americas & East) Africa) • 33 years of ban
Slide 28: Industry Will Need to Fund Around US$90 Billion of Aircraft in 2024
Industry Will Need to Fund Around US$90 Billion of Aircraft in 2024 Passenger aircraft deliveries Passenger aircraft >100 seats1 Narrowbody Widebody 2,000 1,939 1,717 1,634 1,587 1,516 1,500 1,214 1,201 1,187 1,103 1,000 950 716 1,641 1,348 1,431 1,271 1,134 1,032 500 986 1,000 819 817 539 0 2017 20
Slide 29: Growing Lessors' Share of the Market
Growing Lessors’ Share of the Market Proportion of fleet on operating lease 23% 30% 42% 50% 52% 1990 2000 2010 2020 30 Jun 2024 Lessors own 52% of the aircraft market today Source: Ascend, as at 30 June 2024 based on aircraft of 100 seats. Fleet data in 2020 included aircraft in service and aircraft
Slide 30: Strong Recovery in Aircraft Values
Strong Recovery in Aircraft Values Peak to Trough Previous Peak to Trough Previous 52 months WB Peak 87 months NB Peak +43% +47% Aircraft market values improved significantly in the last two years underpinned by robust passenger traffic Source: BOC Aviation analysis, Cirium 30
Slide 31: Improving Airline Industry Profits
Improving Airline Industry Profits IATA global airline industry net post-tax profit Estimated / Forecast by IATA Economics, US$ billion 40 26 27 31 20 0 -4 -20 -40 IATA initially forecast total -41 NPAT of US$26 billion for -60 the global industry in Dec -80 2023, and raised it 19% in -100 June 2024
Slide 32: APAC Airlines Drive Global Passenger Demand Growth
APAC Airlines Drive Global Passenger Demand Growth Global and regional total passengers, year-on-year % change 15.7% 9.2% 9.7% 6.8% 5.8% 6.1% 4.8% 3.8% Asia Pacific World 2024 2025 2026 2027 Airlines in Asia Pacific expected to grow faster than any other region for the next four years Sources: IATA
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