Aircastle Announces Second Quarter 2021 Results

STAMFORD, Conn., Oct. 13, 2021 /PRNewswire/ --

Key Financial Metrics for the Three Months ended August 31, 2021

• Total revenues of $157.7 million
• Net income of $9.8 million
• Adjusted EBITDA⁽¹⁾ of $197.5 million
• Gain on sale of flight equipment of $1.5 million

Highlights for the Three Months ended August 31, 2021

• Delivered four new Airbus A320neo aircraft to Frontier Airlines, completing four-aircraft deal; acquired two additional single-aisle aircraft
• Issued $400 million of Preference Shares at a coupon of 5.25%; issue was four times oversubscribed
• Generated sales proceeds of $55 million from the sale of bankruptcy claims
• For the first six months cash flows from operations increased to $180 million, up 57%, from first quarter 2021
• In June, Moody's upgraded Aircastle's outlook to Stable
• For the six months ended August 31, 2021, sold four aircraft and other flight equipment for proceeds of $78 million and a total gain on sale of $11 million

Liquidity

• As of October 1, 2021, total liquidity of $2.4 billion includes $1.4 billion of undrawn credit facilities, $0.3 billion of unrestricted cash, $0.3 billion of contracted asset sales, and $0.4 billion of projected adjusted operating cash flows through October 1, 2022
• For the three months ended August 2021, collections represented approximately 87% of lease rental and direct financing and sales-type lease revenues
• We have 223 unencumbered aircraft with a net book value of $5.6 billion

Mike Inglese, Aircastle's Chief Executive Officer, commented, "We are on the recovery side of what has been the worst economic shock in aviation history. Traffic levels in China, the US, Mexico, Brazil, Russia and parts of Europe have shown near-2019 air traffic volumes. The recent announcement of the re-opening of the US to all vaccinated travelers should bode well for long haul traffic. Our laser-focus on liquidity has helped us to keep cashflows strong and move forward with strategic investing."

Mr. Inglese concluded, "Aircraft leasing has been a vital source of capital for airlines looking to de-lever their balance sheets as global aviation continues to recover, aided by the narrowing vaccine gap. We believe our favorable credit rating, along with the opportunities afforded by our unique ownership arrangement with the Marubeni Corporation and Mizuho Leasing, strategically position us for future growth."

Aviation Assets

As of August 31, 2021, Aircastle owned 255 aircraft and other flight equipment having a net book value of $6.8 billion.  We also manage nine aircraft with a net book value of $305 million dollars on behalf of our joint venture with Mizuho Leasing.

Deferrals   

Even as the airline industry recovers, airlines continue to seek support from their respective governments, raise debt and equity, delay or cancel new aircraft orders and request concessions from lessors. As of October 8, 2021, six of our airline customers were subject to judicial insolvency proceedings or similar protection.  We lease 22 aircraft to these customers, which comprise 13% of our net book value of flight equipment and 10% of our reported lease rental and direct financing and sales-type lease revenues for the twelve months ended August 31, 2021.  Of these 22 aircraft, thirteen are on lease with LATAM for which we have signed restructured leases, subject only to LATAM emerging from the Chapter 11 process.  While additional airline bankruptcies and liquidations may yet occur in future periods, we remain confident that our core customers who are leading low-cost carriers and major US and global carriers, have the means to survive the COVID-19 crisis.  

As of October 8, 2021, our total deferrals, net of repayments, were $101.8 million. These deferrals have been agreed with twenty airlines, representing 26% of our customer base.  Of the total deferrals, $89.8 million is included in our August 31, 2021, Consolidated Balance Sheet with the balance representing future lease payments.  Approximately 77% of our total deferrals as of October 8, 2021, have been agreed to as part of broader lease restructurings, which generally include term extensions, better security packages or other valuable consideration in exchange for near-term economic concessions and have repayment terms that extend beyond twelve months.  Deferrals represented approximately 18% of our reported lease rental and direct financing and sales-type lease revenues for the twelve months ended August 31, 2021. 

We hold $518.3 million of maintenance reserves and $77.1 million of security deposits, as well as an additional $143.3 million in letters of credit from our lessees.  These combined reserves total $738.7 million, represent 11% of NBV, and provide significant protection against potential future airline failures and the unscheduled return of additional aircraft.   

Preference Share Issuance

In early June we issued $400 million of preference shares with a dividend of 5.25%.  The original proposed amount for this capital raise was $300 million at targeted dividend of 5.625%.  Due to strong demand, the transaction was upsized with the lower dividend.  The issue has a perpetual term and receives 50% equity credit treatment from Moody's, S&P and Fitch Ratings, in line with their respective rating methodologies.  At the time of issuance, Aircastle's outlook was upgraded to Stable by Moody's. 

Conference Call

In connection with this press release, management will host a conference call on Wednesday, Oct 13, 2021, at 9:00 A.M. Eastern Time.  All interested parties are welcome to participate on the live call.  The conference call can be accessed by dialing (800) 437-2398 (from within the U.S. and Canada) or (786) 204-3966 (from outside of the U.S. and Canada) ten minutes prior to the scheduled start and referencing the passcode "2526167".

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.aircastle.com.  Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. 

For those who are not available to listen to the live call, a replay will be available until 12:00 P.M. Eastern Time on Friday, October 15, 2021, by dialing (888) 203-1112 (from within the U.S. and Canada) or (719) 457-0820 (from outside of the U.S. and Canada); please reference passcode "2526167".

About Aircastle Limited

Aircastle Limited acquires, leases, and sells commercial jet aircraft to airlines throughout the world.  As of August 31, 2021, Aircastle owned and managed on behalf of its joint ventures 264 aircraft leased to 76 customers located in 42 countries.

Safe Harbor

All statements in this press release, other than characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not necessarily limited to, statements relating to our proposed public offering of notes and our ability to acquire, sell, lease or finance aircraft, raise capital, pay dividends, and increase revenues, earnings, EBITDA and Adjusted EBITDA and the global aviation industry and aircraft leasing sector. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "may," "will," "would," "could," "should," "seeks," "estimates" and variations on these words and similar expressions are intended to identify such forward-looking statements. These statements are based on our historical performance and that of our subsidiaries and on our current plans, estimates and expectations and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements; Aircastle can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any such forward-looking statements which are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this press release. These risks or uncertainties include, but are not limited to, those described from time to time in Aircastle's filings with the SEC and previously disclosed under "Risk Factors" in Item 1A of Aircastle's most recent Form 10-K and any subsequent filings with the SEC.  In addition, new risks and uncertainties emerge from time to time, and it is not possible for Aircastle to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. Aircastle expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.   

Contact:                                                                                                                                              
Aircastle Advisor LLC                                                                        
Jim Connelly, SVP ESG & Corporate Communications                      
Tel: +1-203-504-1871                                                                         
[email protected]  

SOURCE Aircastle Limited