BOC AVIATION(HK:02588)2021-09-27 23:45Financial Performance - The company recorded a net profit after tax of $254 million for the first half of 2021, a decrease from $323 million in the same period last year[3]. - Profit before tax decreased to $288 million from $354 million year-on-year[8]. - The company recorded a net profit of $254 million for the first half of 2021, a decrease compared to the same period last year due to the ongoing impact of COVID-19 on cash flows and aircraft values[24]. - The net profit after tax for the period ended June 30, 2021, was $254 million, a decrease of 21.5% compared to $323 million in the same period last year, primarily due to the impact of the COVID-19 pandemic on airline customers and aircraft buyers[44]. - The net profit attributable to the owners of the company for the first half of 2021 was $253,926 thousand, down from $323,332 thousand in the same period of 2020, reflecting a decrease of about 21.5%[116]. - The pre-tax profit for the period from January 1, 2021, to June 30, 2021, was $287,623,000, a decrease of 18.7% compared to $353,716,000 in the same period of 2020[123]. Revenue and Income - Operating revenue and other income increased by 7% to $1.107 billion compared to $1.035 billion in the first half of 2020[7]. - Total operating revenue and other income rose by 7% to $1.107 billion, while core leasing rental contributions decreased by 6% to $344 million[26]. - Total operating income for the first half of 2021 was $1,107,361 thousand, an increase from $1,035,033 thousand in the same period of 2020, representing a growth of approximately 7%[116]. - Total revenue from lease rental income was $926,554 thousand for the first half of 2021, up from $887,993 thousand in the same period of 2020, marking an increase of about 4.3%[116]. - Interest and fee income increased by 26.6% to $95.442 million in H1 2021, attributed to pre-delivery payment transaction fees and interest from six finance lease aircraft[48]. Costs and Expenses - Total costs and expenses rose by 20.3%, mainly due to aircraft impairment and increased depreciation from fleet expansion[44]. - The company's total operating expenses for the first half of 2021 were $819,738 thousand, compared to $681,317 thousand in the same period of 2020, representing an increase of approximately 20.3%[116]. - Aircraft depreciation increased by 15.2% to $378.539 million in H1 2021, reflecting a rise in aircraft asset values[53]. - Aircraft impairment losses amounted to $83.7 million in H1 2021, significantly higher than $11.6 million in H1 2020[54]. - Financial expenses for the first half of 2021 amounted to $235,920 thousand, compared to $219,844 thousand in the same period of 2020, representing an increase of approximately 7.3%[116]. Assets and Liabilities - The total assets increased from $23.6 billion as of December 31, 2020, to $23.9 billion as of June 30, 2021[8]. - Total assets amounted to $23,892,831 thousand, an increase from $23,568,341 thousand as of December 31, 2020, representing a growth of approximately 1.37%[118]. - Non-current liabilities totaled $16,937,763 thousand, compared to $16,634,199 thousand in the previous period, reflecting an increase of about 1.83%[119]. - The total liabilities amounted to $18,900,539 thousand, slightly up from $18,791,541 thousand, indicating a marginal increase of approximately 0.58%[119]. - The total amount of loans and borrowings as of June 30, 2021, reached $16,998,067, up from $16,698,337 as of December 31, 2020, indicating a growth of approximately 1.8%[161]. Cash Flow and Liquidity - The operating cash flow (excluding interest) slightly increased by 0.4% to $557 million compared to the first half of 2020[7]. - The company has a strong liquidity position with $460 million in cash and cash equivalents, in addition to $5.4 billion of undrawn committed revolving credit facilities[7]. - The company’s available liquidity stood at $5.8 billion as of the end of the reporting period[24]. - Cash generated from operating activities amounted to $797,064,000, slightly up from $788,300,000 in the previous year, indicating a year-over-year increase of 0.97%[124]. - Cash and cash equivalents totaled $460.271 million as of June 30, 2021, up from $407.556 million at the same date in 2020, indicating an increase of about 13%[155]. Fleet and Aircraft - The fleet consists of 536 aircraft, including 377 owned aircraft with an average age of 3.7 years and an average remaining lease term of 8.1 years[9]. - The fleet size increased from 358 to 377 aircraft, despite delays in the delivery of several new aircraft[24]. - The company committed to purchase eight additional Airbus A320NEO aircraft, which improve fuel efficiency by 20% compared to previous models[27]. - The company has committed to purchasing 122 aircraft by 2024, with a total procurement value of nearly $51 billion[28]. - The company’s aircraft leasing business accounted for 50% of new aircraft deliveries in the first half of 2021, highlighting its significant role in the recovery of the aviation industry[26]. Dividends and Shareholder Information - The interim dividend declared is $0.1098 per share, maintaining the same payout ratio of 30% of net profit after tax as in previous years[4]. - The board approved an interim dividend of $0.1098 per share, representing 30% of the net profit after tax for the first half of 2021, consistent with previous years[24]. - The company declared an interim dividend of $0.1098 per share for the six months ended June 30, 2021, to be paid on October 13, 2021[87]. - The company's dividend policy allows for a maximum distribution of 35% of the after-tax net profit for the full financial year[86]. Corporate Governance and Compliance - The audit committee consists of three independent non-executive directors and two non-executive directors, ensuring oversight of financial reporting and internal controls[101]. - The company has fully complied with all provisions of the corporate governance code during the six-month period ending June 30, 2021[103]. - The company has implemented a trading policy for directors that meets or exceeds the standards set by the corporate governance code[104]. Employee and Management Information - As of June 30, 2021, the number of employees engaged in business operations and management was 185, compared to 179 as of June 30, 2020[84]. - Personnel expenses for the six months ended June 30, 2021, were $28 million, accounting for approximately 2.5% of total operating revenue and other income, down from $45 million or 4.4% in the same period of 2020[84]. - The company maintains good employment relations with no employees participating in unions or collective bargaining agreements[84]. - The long-term incentive plan includes cash and stock components, with restricted stock units granted since 2018[84]. Risk Management and Future Outlook - The company has enhanced monitoring of credit risk due to the COVID-19 pandemic, particularly concerning airline customers and suppliers[200]. - The mid-term report includes forward-looking statements that reflect the company's current views on future events, subject to known and unknown risks[105].