Boc Aviation Limited · HKEX:2588
Boc Aviation — H1 2020 Earnings Presentation
28 slides from Boc Aviation's earnings presentation, August 2020
Slide 1: 2020 Interim Results Review
2020 INTERIM RESULTS REVIEW AUGUST 2020
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 2020 Overview
1H 2020 OVERVIEW ©) BOC AVIATION 3
Slide 4: A Strong Performance in a Challenging Environment
A Strong Performance in a Challenging Environment Resilient earnings growth1 Robust balance sheet4 US$323 million 1% US$22.6 billion 14% Net profit after tax Total assets US$0.47 1% US$4.6 billion 1% Earnings per share Total equity Driven by: US$6.69 1% US$1,035 million 11% Net assets per share Tota
Slide 5: Achieved First Half Growth Across the Business
Achieved First Half Growth Across the Business • Recorded new milestones1: • Committed to purchase 900 aircraft • Signed more than 1,000 lease commitments • Signed 76 lease commitments • All aircraft scheduled for delivery from our orderbook before 2023 have been placed with airline customers • Took
Slide 6: Stable Revenues and Earnings Growth
Stable Revenues and Earnings Growth Fleet and other income growth underpins Rising core lease rental contribution1 growth in revenues US$ million US$ million 366 327 341 1,035 930 825 264 228 670 579 1H 2016 1H 2017 1H 2018 1H 2019 1H 2020 1H 2016 1H 2017 1H 2018 1H 2019 1H 2020 Continuing PBT Growt
Slide 7: Lease Rental Income Continues to Dominate Revenue
Lease Rental Income Continues to Dominate Revenue Lease rental income consistently over 85% of total revenues and other income US$ million Net gain on sale of aircraft 1,035 2.5% 930 Interest, fee income and 121 22 76 26 others 11.7% 832 888 1H 2019 1H 2020 Lease rental income Net gain on sale of ai
Slide 8: Core Leasing Business Supports Earnings Growth
Core Leasing Business Supports Earnings Growth Around 70% of PBT is from core lease rental We have a long average remaining lease contribution1, net of costs term4 Net gain on sale of aircraft Number of years 7% Interest and fee 8.5 income2 8.2 8.3 8.4 11% 7.3 Others 13% Core lease rental contributi
Slide 9: Maintained Stable Net Lease Yield
Maintained Stable Net Lease Yield Lease rate factor1 reflects large amount of new Cost of debt3 reflects lower floating rates and business added in 1H 2020 active fund raising at lower rates 10.3% 10.5% 10.8% 10.7% 10.4% 3.6% 3.3% 3.2% 2.8% 2.5% 2016 2017 2018 2019 1H 2020 2016 2017 2018 2019 1H 202
Slide 10: Stable Debt Structure
Stable Debt Structure US$ billion Bonds 2.2 Bonds (1.0) (0.0) Loans (0.2) Loans 1.6 16.0 Debt 13.5 12.3bn outstanding since 1 Jan 2020 Indebtedness as at 1 Repayment Net RCF borrowings New debt Indebtedness as at January 2020 30 June 2020 90% of debt unchanged from 1 January 2020 Due to rounding, nu
Slide 11: Globally Diversified Portfolio
Globally Diversified Portfolio Lease portfolio diversified by customer1,2 …and diversified by geography1,3 Qatar Airways Americas 9.6% 10.5% Cathay Pacific 6.0% Chinese Mainland, Hong Kong SAR, Macau SAR Air China Middle East and and Taiwan 5.1% Africa 32.2% EVA Airways 11.4% 5.1% Others Norwegian 5
Slide 12: Proactive Strategy
Proactive Strategy New business generation in 1H 2020 Well-dispersed lease expiries1 • New business delivering over the next two 300 250 85.9% 100% 80% years features long-term leases, which adds 200 Average remaining lease term of 8.5 years 60% to revenue stability and visibility 150 40% 100 4.2% 6
Slide 13: Robust Operating Cash Flow Net of Interest
Robust Operating Cash Flow Net of Interest Operating cash flow net of interest 1 as at 30 Operating cash flow net of interest1 June 2020 US$ million • 1H 2020 operating cash flows net of interest remained robust despite (233) challenging operating environment 788 555 • Down 12% compared with 1H 2019
Slide 14: Diverse Funding Channels Utilised in First Half
Diverse Funding Channels Utilised in First Half Sources and Uses of Cash US$ million Sources Uses 207 (176) 1,600 (1,012) 3,983 (2,973) 2,150 Undrawn 3,585 committed RCF 555 (175) (30) Cash and 252 398 cash equivalents Cash and Operating 1 Bond Bank loans Asset sales Regular Bond and CAPEX Dividend
Slide 15: Flexible Capital Structure and Ample Backstop Liquidity
Flexible Capital Structure and Ample Backstop Liquidity Sources of debt1 Outstanding debt amortises over a long term BOC US$ billion 2 BOC 3% ECA 2 10% ECA 5% 3% 16 Loans Loans 26% 14 24% 12 10 8 Bonds Bonds 6 66% 63% 4 2 0 2019 1H 2020 2020 2021 2022 2023 2024 2025 and beyond Loans Notes Increasing
Slide 16: 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 114 15 0 129 Airbus A320NEO family 52 0 88 140 Airbus A330CEO family 12 3 0 15 Airbus A330NEO family 2 0 6 8 Airbus A350 family 9 0 0 9 Boeing 737NG fa
Slide 17: Steadily Growing Balance Sheet and Aircraft Fleet
Steadily Growing Balance Sheet and Aircraft Fleet Growing balance sheet US$ billion 22.6 18.3 19.8 16.0 3.0 5.3 13.4 3.3 2.3 2.7 13.7 15.0 16.8 17.3 10.7 2016 2017 2018 2019 1H 2020 Aircraft NBV 1 Other assets Disciplined increase in fleet size Number of owned aircraft 334 317 303 287 246 2016 2017
Slide 18: New Investments Drive Growing Committed Lease Revenues
New Investments Drive Growing Committed Lease Revenues Orderbook delivery schedule1,2 Resculpted orderbook to match demand Number of aircraft • Committed to purchase 86 aircraft 70 • 76 placed on long-term leases 54 34 41 40 • Delivered 20 of these in 1H 2020 17 • 100% on-time collection rate in 1H
Slide 19: Proactive Investment Strategy
Proactive Investment Strategy • Disciplined investment approach backed by strong liquidity position • Available liquidity of US$4 billion as at 30 June 2020 • Raising debt funding is a core competency of our company • Raised over US$30 billion since January 2007 through a combination of loans, debt
Slide 20: How We Invest
How We Invest Number of aircraft delivered, purchased and sold Global PLB acquisitions European COVID-19 Financial Crisis in the down cycle Crisis 41 19 24 13 16 (3) 9 14 45 27 16 7 4 6 22 18 17 14 31 21 17 5 58 61 6 5 44 48 50 (5) 12 41 27 31 20 17 22 22 7 14 3 (12) (12) (3) (10) (10) (6) (5) (21)
Slide 21: Conclusion
Conclusion • Resilient performance achieved in a difficult environment • NPAT was stable at US$323 million • Interim dividend per share of US$0.1398, payable on 15 October 2020 • Payout ratio of 30% of 1H 2020 NPAT • Total revenues increased 11% to US$1 billion • Long-term sustainable growth support
Slide 22: Appendices
APPENDICES ©) BOC AVIATION
Slide 23: The BOC Aviation Journey
The BOC Aviation Journey Ownership Total assets 1993 SALE established with 50:50 joint US$ 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 24: BOC Aviation – Who Are We?
BOC Aviation – Who Are We? Top 5 global Into our 27th aircraft Total assets of Industry leading year of operating US$22.6bn performance profitability lessor • The largest based • Aircraft net book • Consistently • Average ROE of in Asia, by value value of profitable since 15% since 2007 of owned fle
Slide 25: Globally Diverse Management Team
Globally Diverse Management Team Robert Martin Zhang Xiaolu Phang Thim Fatt Steven Townend David Walton Deng Lei Paul Kent Managing Director Vice-Chairman & Deputy Managing Deputy Managing Deputy Managing Chief Commercial Chief Commercial & Chief Executive Deputy Managing Director & Chief Director D
Slide 26: Core Competencies - BOC Aviation Track Record
Core Competencies - BOC Aviation Track Record Since inception in 1993: Purchasing 900 aircraft purchased totalling more than US$51 billion Leasing More than 1,030 leases executed with > 160 airlines in 57 countries and regions Financing More than US$31 billion in debt raised since 1 January 20
Slide 27: Operating Leasing Driven by Three Independent Cycles
Operating Leasing Driven by Three Independent Cycles Airline Market Demand (Revenue) Airline cash flows driven by: • GDP growth • Government border controls and financial support • Trade flows • Fuel costs Demand Liquidity Cycle Cycle Supply of Aircraft (Procurement) (Airline (Financial • Manufactur
Slide 28: www.bocaviation.com
www.bocaviation.com BOC Aviation Limited 8 Shenton Way #18-01 Singapore 068811 Phone +65 6323 5559 Facsimile +65 6323 6962 Incorporated in the Republic of Singapore with limited liability Company Registration No. 199307789K 28