BOC AVIATION(HK:02588)2020-04-16 00:00Financial Performance - For the year ended December 31, 2019, total operating revenue and other income increased by 15% to $1.976 billion[6] - The company achieved a pre-tax profit of $775 million and a post-tax net profit of $702 million, both representing a growth of 13% compared to 2018[11] - Earnings per share (EPS) reached $1.01, reflecting a 13.2% increase from the previous year[11] - Total operating revenue and other income rose to nearly $2 billion, reflecting a 15% year-on-year growth[17] - The after-tax net profit for 2019 increased to $702 million, marking a 16% return on equity[36] - Net profit for the year was $702.3 million, a 13.2% increase from $620.4 million in 2018[70] - Total operating income primarily came from lease rental income, which increased due to the growth of the aircraft portfolio[25] - Lease rental income was $1.7 billion, up 10.5% from $1.5 billion in 2018, primarily due to the full-year impact of newly added aircraft assets and new aircraft assets added in 2019[61] - Net gains from aircraft sales amounted to $134.3 million, a 47.9% increase from $90.8 million in 2018, attributed to higher profits per aircraft sold in 2019[62] - Total costs and expenses were $1.2 billion, a 15.4% increase from $1 billion in 2018, consistent with the growth in operating revenue[63] Asset and Equity Growth - Total assets grew by 8% to $19.764 billion as of December 31, 2019[11] - As of December 31, 2019, total assets grew by $1.5 billion to $19.8 billion, with aircraft being the largest component[40] - The company's equity increased by $400 million to $4.6 billion as of December 31, 2019[44] - Total assets of property, plant, and equipment increased by 7.5% from $18 billion on December 31, 2018, to $19.3 billion on December 31, 2019, due to the net addition of 14 aircraft[73] - Total equity rose by 9.1% from $4.2 billion on December 31, 2018, to $4.6 billion on December 31, 2019, despite a dividend payout of $224 million[81] Aircraft Operations - The fleet consisted of 523 owned, managed, and ordered aircraft, with an average age of 3.1 years and an average remaining lease term of 8.4 years[13] - The company delivered 54 aircraft in 2019 and signed 87 lease commitments during the year[13] - The aircraft utilization rate reached 99.6% with a cash collection rate of 96.9%[13] - The order book included 166 aircraft, indicating strong future growth potential[13] - The average aircraft age in the owned fleet is 3.1 years, with an average remaining lease term of 8.4 years, among the longest in the aircraft operating leasing industry[21] Liquidity and Debt Management - The company maintained strong liquidity with cash and short-term deposits totaling $287 million and undrawn committed loan facilities of $4.4 billion[6] - In 2019, the company raised $3.9 billion in funding, including $2.1 billion from the debt capital markets, and had a total cash and undrawn credit facilities of $4.6 billion as of December 31, 2019[22] - The average debt cost rose from 3.3% in 2018 to 3.6% in 2019, reflecting an increase in fixed-rate debt and interest rate hedging[35] - The total debt-to-equity ratio remained stable at 2.9 times as of December 31, 2019, compared to 3.0 times as of December 31, 2018[84] - The total debt repayment schedule indicates a total of $13.5 billion in debt due from 2020 to 2025, with $2.0 billion due in 2023 and $2.7 billion in 2024[88] Dividend Policy - The board proposed a final dividend of $0.2153 per share, bringing the total dividend for the fiscal year to $0.3541 per share, a 13% increase[6] - The company declared a final dividend of $0.2153 per share, resulting in a total dividend of $0.3541 per share for 2019, a 13% increase from 2018[17] - The company maintains a dividend policy of distributing up to 35% of the annual net profit after tax[156] Corporate Governance - The company is committed to maintaining high standards of corporate governance and risk management through its various committees[103] - The board of directors consists of a chairman, four non-executive directors, four independent non-executive directors, and two executive directors, ensuring a diverse and independent structure[118] - The company has adopted a board diversity policy, considering various factors such as gender, age, cultural background, and professional experience when appointing board members[119] - The board is responsible for strategic leadership, approving business plans, and overseeing financial performance, with a focus on risk management and internal controls[116] - The company has established a clear governance framework with five permanent committees to assist the board in fulfilling its responsibilities[136] Risk Management - The company aims to manage risks to achieve business objectives rather than eliminate them entirely[131] - The company is focused on mitigating risks related to customer credit, aircraft asset and portfolio risks, cash flow, liquidity, hedging, and financing risks[143] - The company’s risk management committee conducts ongoing reviews of risk factors affecting the balance sheet and external operating environment[146] Strategic Initiatives - The company is focused on expanding its market presence and enhancing its operational efficiency through strategic initiatives and management expertise[99] - The company aims to leverage its strong leadership to navigate market challenges and capitalize on growth opportunities in the aviation leasing sector[102] - The company is exploring potential mergers and acquisitions to enhance its competitive position in the market[102] Employee and Management Information - Employee costs for the year ended December 31, 2019, amounted to $80 million, representing 4.0% of total operating revenue, a decrease of 12.8% from $92 million in 2018[95] - The number of employees engaged in business operations and management increased to 176 as of December 31, 2019, from 169 in 2018[94] - The management team includes professionals with advanced degrees and significant experience in finance and economics, ensuring informed decision-making[104] Related Party Transactions - The company has confirmed that all related party transactions during the fiscal year ended December 31, 2019, complied with the Listing Rules and were conducted on normal commercial terms[198] - The independent non-executive directors have reviewed the ongoing related party transactions and confirmed their compliance with the company's pricing policy[198]