Boc Aviation Limited · HKEX:2588
Boc Aviation — H1 2021 Earnings Presentation
30 slides from Boc Aviation's earnings presentation, August 2021
Slide 1: 2021 Interim Results Review
2021 INTERIM RESULTS REVIEW AUGUST 2021
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 2021 Overview
1H 2021 OVERVIEW ©) BOC AVIATION 3
Slide 4: Another Strong Performance in a Challenging Environment
Another Strong Performance in a Challenging Environment Resilient core business1 Robust balance sheet4 US$1,107 million 7% US$23.9 billion 1% Total revenues and other income Total assets US$557 million 0.4% US$5.8 billion 13% Operating cash flow net of interest2 Total available liquidity US$434 mill
Slide 5: 1H 2021 NPAT Changes vs 1H 2020
1H 2021 NPAT Changes vs 1H 2020 Year-on-Year change (US$ million) Growth in revenues Changes in costs Changes in exceptional (+$72m) (-$50m) items (-$88m) 36 (23) (50) 20 39 (16) 16 (72) (16) (3) 323 254 1H 2020 Lease rental Interest and Other Net gain on Depreciation Finance Other costs Impairment
Slide 6: Resilient Core Business in 1H 2021
Resilient Core Business in 1H 2021 • Recorded more than US$5 billion of cumulative earnings1 • Celebrated our 5th year as a listed company • Annual General Meeting was chaired by new Chairman, Mr. Chen Huaiyu • We welcomed three new directors: Mr. Chen Huaiyu, Mr. Wang Xiao and Mdm. Wei Hanguang • P
Slide 7: Strong Liquidity
Strong Liquidity • Raising debt funding is a core competency of our company • Raised over US$36 billion since January 2007 • The largest Singapore based corporate issuer of USD bonds in aggregate since September 2012 • Raised US$1.5 billion of bonds and US$500 million of bank loans in 1H 2021 • 1H 2
Slide 8: How We Invest
How We Invest Number of aircraft delivered, purchased and sold Global Opportunistic PLB Financial European Covid-19 Crisis acquisitions in the Crisis down cycle 41 19 24 13 16 (3) 9 14 41 45 27 16 7 4 6 19 22 18 17 14 31 21 43 5 58 61 6 5 44 48 50 18 (5) 12 41 27 31 17 22 22 16 7 14 11 (12) (12) (3)
Slide 9: Resilient Performance in a Difficult Market
Resilient Performance in a Difficult Market Fleet growth underpins growth in revenues High core lease rental contribution2 US$ million US$ million 366 1,107 341 344 1,035 930 1H 2019 1H 2020 1H 2021 1H 2019 1H 2020 1H 2021 Improving profit before tax and impairment Resilient NPAT performance charges
Slide 10: Lease Rental Income Continues to Dominate Revenue
Lease Rental Income Continues to Dominate Revenue Lease rental income consistently over 80% of total revenues and other income Net gain on sale of aircraft US$ million Interest, fee income 0.3% 1,107 1,035 and others 177 16.0% 121 3 26 888 927 1H 2020 1H 2021 Lease rental Lease rental income Net gai
Slide 11: Long Term Leases Enhance Revenue Visibility
Long Term Leases Enhance Revenue Visibility We have a long average remaining lease Well-dispersed lease expiries2 term1 Number of years 300 82.6% 100% 8.4 8.6 8.1 250 80% 200 Average remaining lease term of 8.1 years 60% 150 40% 100 50 1.2% 1.7% 2.9% 4.8% 6.1% 20% 0 0% 2H 2021 2022 2023 2024 2025 20
Slide 12: Margins Impacted by Covid-19
Margins Impacted by Covid-19 Lease rate factor1 high at around 10% Reduced cost of debt3 10.7% 3.6% 10.0% 9.6% 3.2% 2.9% 2019 2020 1H 2021 2019 2020 1H 2021 Aircraft deliveries by quarter2 Net lease yield4 Number of aircraft 53 in 2020 28 in 1H 2021 8.4% 7.9% 7.5% 25 13 14 14 9 6 1Q 2020 2Q 2020 3Q
Slide 13: Stable Debt Structure
Stable Debt Structure US$ billion Bonds (0.7) Bonds 1.5 (0.8) Loans (0.4) Loans 0.6 17.1 Debt 16.8 15.0bn outstanding since 1 Jan 2021 Indebtedness as at Repayment Net RCF New debt Indebtedness as at 1 January 2021 borrowings 30 June 2021 89% of debt unchanged from 1 January 2021 and debt to equity
Slide 14: Globally Diversified Lease Portfolio
Globally Diversified Lease Portfolio Lease portfolio diversified by customer1,2 …and increasingly diversified by geography1,3 Qatar Airways 8.5% Americas Chinese Mainland, 16.6% United Airlines Hong Kong SAR, 8.1% Macau SAR and Taiwan Middle East 29.4% Air China and Africa 5.3% 11.4% Cathay Pacific
Slide 15: Robust Operating Cash Flow Net of Interest
Robust Operating Cash Flow Net of Interest Operating cash flow net of interest 1 for the Operating cash flow net of interest1 period ended 30 June 2021 US$ million • Stable compared with 1H 2020 despite a challenging environment (240) 797 557 • The incremental committed investment in 85 purchase-and
Slide 16: Diverse Funding Channels Utilised in 1H 2021
Diverse Funding Channels Utilised in 1H 2021 Sources and Uses of Cash US$ million Sources Uses 5,825 198 (1,128) 251 Undrawn 630 committed 5,365 credit 1,500 (686) facilities (405) (765) 557 408 (81) (19) Cash and 460 cash equivalents Cash and Net cash 1 Bond Bank loans Asset sales PDP Capex Bond Lo
Slide 17: 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 12% 10% 15 Loans Loans 24% 22% 10 Bonds Bonds 5 64% 68% 0 2021 2022 2023 2024 2025 2026 and 2020 1H 2021 beyond Loans Bonds Near term debt maturities well covered
Slide 18: 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 108 15 0 123 Airbus A320NEO family 79 0 51 130 Airbus A330CEO family 12 1 0 13 Airbus A330NEO family 4 0 2 6 Airbus A350 family 9 0 0 9 Boeing 737NG fa
Slide 19: Steadily Growing Balance Sheet and Aircraft Fleet
Steadily Growing Balance Sheet and Aircraft Fleet Growing balance sheet US$ billion 23.6 23.9 18.3 19.8 4.3 16.0 4.7 3.3 3.0 2.3 16.8 18.9 19.6 13.7 15.0 2017 2018 2019 2020 1H 2021 1 Aircraft NBV Other assets Disciplined increase in fleet size Number of owned aircraft 377 358 303 317 287 2017 2018
Slide 20: New Investments Drive Growing Committed Lease Revenues
New Investments Drive Growing Committed Lease Revenues Average annual capital expenditure in excess of High committed future lease revenues of US$4 billion since IPO US$20 billion US$ billion US$ billion 4.4 4.6 4.2 Scheduled to be delivered 4.1 4.0 3.2 1.6 1.6 1.5 0.5 2.8 2.6 2.7 3.0 1.1 15.5 Owned
Slide 21: Conclusion
Conclusion • Respectable first half performance achieved in a challenging environment • Record high first half revenues and other income of US$1.1 billion • Operating cash flow net of interest paid of US$557 million stable compared with 1H 2020 • Net profit after tax of US$254 million • Maintained t
Slide 22: Appendices
APPENDICES ©) BOC AVIATION
Slide 23: The BOC Aviation Journey
The BOC Aviation Journey Ownership Total assets SALE established with 50:50 joint US$ billion 1993 ownership between Singapore Airlines and Boullioun Aviation Services Temasek and GIC each became 1997 14.5% shareholders 1997 >0.3 2000 >1 Bank of China acquired 100% of 2006 >3 2006 SALE on 15 Dec 200
Slide 24: BOC Aviation – Who Are We?
BOC Aviation – Who Are We? Top 5 global aircraft Total assets of 27th year of Industry leading operating US$23.9bn profitability performance lessor • The largest based • Aircraft net book • Consistently • Average ROE of in Asia, by value value of profitable since c.15% since 2007 of owned fleet US$1
Slide 25: Globally Diverse Management Team
Private & Confidential 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 Of
Slide 26: Core Competencies - BOC Aviation Track Record
Core Competencies - BOC Aviation Track Record Since inception in 1993: • Purchasing 890 aircraft purchased totalling approximately US$51 billion • Leasing More than 1,080 leases executed with > 160 airlines in 57 countries and regions • Financing More than US$36 billion in debt raised since 1 Januar
Slide 27: Increasing Proportion of Fixed Rate Leases and Debt
Increasing Proportion of Fixed Rate Leases and Debt Proportion of fixed rate leases rising steadily1 By net book value 17% 13% 10% 34% 24% 83% 87% 90% 66% 76% 2017 2018 2019 2020 1H 2021 Rising proportion of fixed rate debt2 23% 25% 21% 39% 53% 77% 75% 79% 61% 47% 2017 2018 2019 2020 1H 2021 Fixed r
Slide 28: Inoculation Rates Drive Recovery in Airline Schedules
Inoculation Rates Drive Recovery in Airline Schedules 120 Doses administered per 100 people as of June 2021 Europe (today) 100 USA China 80 Europe 60 40 North Asia Australasia Russia 20 India Southeast Asia 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 1H 2021 # of flights as a percentage of 1H 2019 Capacity
Slide 29: Rising Utilisation Rates for Younger Narrowbody Aircraft
Rising Utilisation Rates for Younger Narrowbody Aircraft 1st Jan 2020 – 11th Aug 2021 100% Age 0-12: 88% 80% Age 13-18: 78% Age 19-24: 72% 60% Age 25+: 64% 40% 20% 0% Domestic and short haul recovery drives demand for narrowbody aircraft Sources: Cirium fleet data, BOC Aviation analysis 29
Slide 30: 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 30