BOC AVIATION(HK:02588)2025-03-13 09:00Financial Data and Key Metrics Changes - The company reported a net profit after tax of $924 million for the year ended 2024, an increase from $764 million in 2023, representing a 21% growth [4] - Total revenues and other income rose 4% to $2.6 billion for 2024, with operating cash flow net of interest reaching a record $1.9 billion [5][21] - The total assets at year-end were $25.1 billion, with net assets per share increasing by 11% to $9.07 [5][23] - The company declared a final dividend of $0.267 per share, leading to a total dividend of $0.40 per share for 2024, a 21% increase from 2023 [4] Business Line Data and Key Metrics Changes - The operational lease rental income was $1.8 billion, supported by a stable lease rate factor of 10% [21] - Finance lease revenue increased by $148 million to $270 million, with finance lease receivables rising 50% from year-end 2023 to $3.7 billion [21] - Gains on aircraft sales increased by over 50% to $180 million, with 29 aircraft sold compared to 20 in the previous year [21][17] Market Data and Key Metrics Changes - Airline traffic supporting demand for aircraft grew over 10% in 2024, with all regions reporting traffic growth and profitability [5] - The global airline earnings are expected to remain strong, with forecasts of $36.6 billion in profits for 2025 [5] - The requirement for new aircraft financing is anticipated to rise to $100 billion in 2025, a 30% increase from 2024 [9] Company Strategy and Development Direction - The company is focusing on larger value lease transactions and building its delivery pipeline in major markets, despite supply-side shortages affecting aircraft and engine availability [6][7] - The order book remains strong with 232 aircraft, reflecting the demand for new technology aircraft types [14] - The company aims to maintain its position as predominantly an aircraft operating lease company while also expanding its finance lease assets [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth in aircraft assets, with a record market value premium to net book value [26] - The challenges related to supply chain disruptions are expected to ease but will persist to some extent for several years [26] - The anticipated increase in aircraft deliveries and production rates is expected to support growth in the leasing business [51] Other Important Information - The company achieved full recovery of $507 million written down in 2022 related to Russia-based aircraft [10][11] - Changes in senior management were noted, with new appointments aimed at enhancing operational efficiency [11] Q&A Session Summary Question: What is your aircraft delivery pipeline looking like for 2025? - The company has 47 aircraft contracted for delivery in 2025 and expects to add more as the year progresses [30][31] Question: What is the outlook for net yield given interest rate fluctuations? - Management indicated that net lease yield should improve due to higher lease rates from new aircraft deliveries and the expiration of low-yield leases from the pandemic [36][38] Question: How much of your fleet is still tied to below-market leases from the pandemic? - Approximately 13% to 14% of the fleet is still on those leases, with anticipated uplifts of 30% to 40% when remarketed [42][43] Question: What is the expected CapEx for 2025? - The company is guiding for a similar CapEx to last year, with expectations of $4 billion [46][49] Question: How does the global engine issue impact operations? - The impact from engine durability issues has been limited, with improvements expected from new engine programs in the coming years [60][61]