Boc Aviation Limited · HKEX:2588
Boc Aviation — H1 2022 Earnings Presentation
35 slides from Boc Aviation's earnings presentation, August 2022
Slide 1: 2022 Interim Results Review
2022 INTERIM RESULTS REVIEW AUGUST 2022
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 2022 Overview
1H 2022 OVERVIEW ©) BOC AVIATION 3
Slide 4: Earnings Impacted by Russia-Ukraine Conflict
Earnings Impacted by Russia-Ukraine Conflict Key indicators Actual Core1 Explanation (US$ million) (US$ million) Total revenues and other income 1,196 973 - US$223m of income arising from the termination of leases to Russian airlines Core lease rental contribution2 280 280 Nil (Loss) / profit before
Slide 5: Core Business Remains Profitable
Core Business Remains Profitable US$ million (223) (63) 804 206 (313) 1 1H 2022 net loss after Aircraft net book value Cash collateral Tax impact 1H 2022 core NPAT tax (Actual) write down One-time write-down Due to rounding, numbers presented may not add up precisely to the totals provided Note: 1.
Slide 6: Maintained Interim Dividend Payout Ratio
Maintained Interim Dividend Payout Ratio Key indicators 1H 2022 Total interim dividends declared US$62 million Interim dividend payout ratio 30% of core NPAT1 US$0.08892 Interim dividend per share Cumulative dividends of US$1.2 billion paid since IPO All data as at 30 June 2022 Notes: 1. Excluding t
Slide 7: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Key indicators 30 June 2022 31 December 2021 Total assets (US$ billion) 22.8 23.9 Total available liquidity (US$ billion) 6.0 6.0 Total equity (US$ billion) 4.9 5.3 Net assets per share (US$) 7.09 7.59 Gross debt to equity (times) 3.3 3.2 Maintained strong balance
Slide 8: 1H 2022 Highlights
1H 2022 Highlights • Cumulative earnings of more than US$5 billion since inception1 • Paid US$1.2 billion in dividends to shareholders since IPO • 2022 interim dividend payout at 30% of core NPAT2 • Resilient core business and operations • Record high first half total revenues of US$1.2 billion • Si
Slide 9: Stable Balance Sheet and Aircraft Fleet
Stable Balance Sheet and Aircraft Fleet Balance sheet of around US$23 billion US$ billion 23.6 23.9 22.8 18.3 19.8 4.3 4.7 3.7 3.3 3.0 16.8 18.9 19.6 19.1 15.0 2018 2019 2020 2021 1H 2022 1 Aircraft NBV Other assets Disciplined increase in fleet size Number of owned aircraft 380 390 358 303 317 2018
Slide 10: Popular and Fuel-Efficient Fleet
Popular and Fuel-Efficient Fleet Our aircraft portfolio Aircraft type Owned aircraft Managed aircraft Aircraft on order1 Total Airbus A320CEO family 100 15 0 115 Airbus A320NEO family 93 0 111 204 Airbus A330CEO family 9 1 0 10 Airbus A330NEO family 6 0 0 6 Airbus A350 family 9 0 0 9 Boeing 737NG fa
Slide 11: How We Invest
How We Invest Number of aircraft delivered, purchased and sold Global Opportunistic PLB Financial European acquisitions in the Covid-19 Crisis Crisis down cycle 41 19 24 13 16 (3) 9 14 41 22 45 27 16 7 4 6 22 18 17 29 14 31 21 43 5 58 61 10 6 5 44 48 50 (5) 12 41 5 27 31 17 22 22 23 14 11 15 7 (12)
Slide 12: New Investments Drive Committed Lease Revenues
New Investments Drive Committed Lease Revenues Orderbook delivery schedule1,2 Total committed capex in excess of US$9 billion Number of aircraft US$ billion 80 5.0 47 45 2.8 32 2.0 11 1.0 0.5 213 0.6 2022 2023 2024 2025 and beyond 2022 2023 2024 2025 and beyond Capex during 1H 2022 Additional target
Slide 13: Resilient Performance in a Challenging Market
Resilient Performance in a Challenging Market Diversified revenue sources underpin growth 1H 2022 operating cash flow net of interest1 US$ million US$ million 1,196 1,107 1,035 (229) 946 717 1H 2020 1H 2021 1H 2022 Net cash flow from Finance expenses Operating cash flow net operating activities of i
Slide 14: Lease Rental Income Continues to Dominate Revenue
Lease Rental Income Continues to Dominate Revenue Lease rental income at 90% of total revenues and other income1 Net gain on sale of aircraft US$ million 1.3% Interest, fee income and others 1,107 973 8.6% 177 3 83 13 927 877 Lease rental income 1H 2021 1H 2022 90.1% Lease rental income Net gain on
Slide 15: Long-Term Leases Enhance Revenue Visibility
Long-Term Leases Enhance Revenue Visibility We have a long average remaining lease Well-dispersed scheduled lease expiries2 term1 Number of years 300 83.7% 100% 8.6 8.3 8.4 Average remaining lease term of 8.4 years 80% 200 60% 100 40% 0.5% 2.4% 4.2% 3.8% 4.0% 1.4% 20% 0 0% 2H 2022 2023 2024 2025 202
Slide 16: Lease Yields Reflect Market Environment During Covid
Lease Yields Reflect Market Environment During Covid Lease rate factor1 Maintained low cost of debt2 3.2% 2.9% 2.9% 10.0% 9.7% 9.1% 2020 2021 1H 2022 Net lease yield3 7.9% 7.6% 7.0% 2020 2021 1H 2022 2020 2021 1H 2022 All data as at 30 June 2022 Notes: 1. Calculated as operating lease rental income
Slide 17: Globally Diversified Portfolio
Globally Diversified Portfolio Lease portfolio diversified by customer1,2 …and increasingly diversified by geography1,3 Qatar Airways Americas 9.5% United Airlines 16.6% Chinese Mainland, Hong 6.6% Kong SAR, Macau SAR Air China and Taiwan 5.2% 27.2% Middle East and Africa Lion Air Group 12.1% 5.2% E
Slide 18: Diverse Funding Channels Utilised in 1H 2022
Diverse Funding Channels Utilised in 1H 2022 Sources and Uses of Cash US$ million Sources Uses 5,971 Undrawn committed 405 (607) 5,520 credit 885 facilities (500) 300 (280) (920) 946 (120) (143) 485 Cash & 451 cash equivalents Cash and Net cash Bond Bank loans Asset sales Capex Bond Loan RCF Dividen
Slide 19: Stable Debt Structure
Stable Debt Structure US$ billion Bonds (0.5) Bonds 0.3 (0.9) Loans (0.3) Loans 0.9 Debt 16.8 outstanding 16.3 15.1bn since 1 Jan 22 Indebtedness as at Repayment Net RCF borrowings New debt Indebtedness as at 1 January 2022 30 June 2022 90% of debt unchanged from 1 January 2022 and gross debt to equ
Slide 20: Flexible Capital Structure and Ample Backstop Liquidity
Flexible Capital Structure and Ample Backstop Liquidity Sources of debt1 Outstanding debt amortises over a long term US$ billion BOC BOC 9% 9% Loans Loans 15 25% 24% 10 Bonds Bonds 5 66% 67% 0 2022 2023 2024 2025 2026 2027 and 2021 1H 2022 beyond Loans Bonds Near term debt maturities well covered by
Slide 21: Fixed Rate Leases and Debt
Fixed Rate Leases and Debt Fixed rate leases dominate1 Stable proportion of fixed rate debt2 By net book value 6% 4% 13% 25% 24% 24% 94% 96% 87% 75% 76% 76% 2020 2021 1H 2022 2020 2021 1H 2022 Fixed rate Floating rate Fixed rate Floating rate High proportion of fixed rate debt reduces impact of risi
Slide 22: Developments Since End of First Half
Developments Since End of First Half • Changes to the portfolio since 30 June: • Committed to acquire six Airbus A320NEO aircraft scheduled for delivery in 2024 • Took delivery of our first two Boeing 787 aircraft since April 2021 • Strong rebound in international travel as market continues to recov
Slide 23: Conclusion
Conclusion • Resilient performance achieved amidst a challenging backdrop • Record first half revenues and other income of US$1.2 billion • Operating cash flow net of interest paid increased 29% to US$717 million • Core NPAT1 of US$206 million • Maintained interim dividend at 30% of core NPAT1 • Mai
Slide 24: Appendices
APPENDICES ©) BOC AVIATION
Slide 25: The BOC Aviation Journey
The BOC Aviation Journey Ownership Total assets 1993 SALE established with 50:50 joint US$ billion ownership between Singapore Airlines and Boullioun Aviation Services 1997 Temasek and GIC each became 1997 >0.3 14.5% shareholders 2000 >1 2006 Bank of China acquired 100% of 2006 >3 SALE on 15 Dec 200
Slide 26: 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$5.0 billion US$22.8 billion Cumulative profits since inception Total assets US$6.0 billion 608 Available liquidit
Slide 27: Globally Diverse Management Team
Globally Diverse Management Team Robert Martin Zhang Xiaolu Steven Townend David Walton Deng Lei Paul Kent Managing Director & Vice-Chairman & Deputy Managing Deputy Managing Chief Commercial Chief Commercial Chief Executive Deputy Managing Director & Chief Director & Chief Officer (Asia Pacific Off
Slide 28: Core Competencies - BOC Aviation Track Record
Core Competencies - BOC Aviation Track Record Since inception in 1993: •• Purchasing Purchasing More than 980 aircraft purchased totalling US$57 billion •• Leasing Leasing More than 1,170 leases executed with more than 170 airlines in 60 countries and regions •• Financing 1 Financing More than US$38
Slide 29: Rising Aircraft Utilisation
Rising Aircraft Utilisation Rising utilisation hours 1st Jan 2020 – 12 August 2022 9 7D moving average utilisation hours (by aircraft 8 Age Age0-12: 0-12:7.6h 7.8h Age 13-18: 6.9h 7 Age 13-18: 7.0h 6 age group) 5 Age 19-24: 3.9h 4 Age25+: Age 19-24: 4.0h 3.9h Age 25+: 3.9h 3 2 1 0 May-20 May-21 May-
Slide 30: Improving Global Air Travel
Improving Global Air Travel Recovery evident across all facets of air transportation Further upside once China re-opens Source: IATA Economics’ Chart of the Week (5 August 2022) 30
Slide 31: Value of Deliveries to Exceed US$120 Billion in 2025
Value of Deliveries to Exceed US$120 Billion in 2025 Annual capex – US$ billion 150 100 50 0 Narrowbody Widebody All data as at 30 June 2022 Source: BOC Aviation Analysis 31
Slide 32: Lessors Own 52% of the Aircraft Market Today
Lessors Own 52% of the Aircraft Market Today Proportion of fleet on operating lease Proportion of fleet on operating lease (%) 25,000 52% 55% 50% 50% 20,000 Number of aircraft 45% 15,000 40% 35% 10,000 30% 5,000 23% 25% 0 20% 1990 1995 2000 2005 2010 2015 2020 30-Jun-22 Airline owned fleet Operating
Slide 33: Market Concentration
Market Concentration Aircraft owned / managed (%) 100% 90% • 2010 : Largest 10 lessors managed 58% • 2015 : Largest 10 lessors managed 54% 80% • 2020 : Largest 10 lessors managed 43% 70% • Jun 2022 : Largest 10 lessors managed 46% 60% • 2010 : Largest 5 lessors managed 46% • 2015 : Largest 5 lessors
Slide 34: Leasing: Customer Segmentation
Leasing: Customer Segmentation • 734 airlines operating today1 • Focus on 94 airlines or only 13% of the airlines in the market – minimum credit score, above 20 aircraft Airline segmentation by credit score and fleet Our target 94 airlines operate 62% of global size fleet2 267, 1% 96, 1% 391, 53% 5,
Slide 35: 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 35