Via
RNS and SGXNET
AVATION PLC
("Avation" or "the
Company")
CHAIRMAN'S AGM
STATEMENT
Avation PLC (LSE: AVAP), the
commercial passenger aircraft leasing company, will hold its Annual
General Meeting today in Singapore which will include the following
Chairman's Statement. The purpose of this statement is to provide
investors with an update on current operations.
Market
IATA's most recent air passenger
market analysis reported continued strength in air travel with
revenue passenger kilometres increasing 7.1% in the year to October
2024, surpassing historical highs.
Market values and lease rates for
commercial aircraft continue to be supported by constrained
deliveries of new aircraft due to continuing supply chain
issues. Avation believes that values of popular new
narrowbody aircraft types have increased by around 5% over the last
year.
Fleet Update
In August 2024 Avation sold two
six-year-old ATR 72-600 aircraft to their lessee, releasing around
US$ 10 million in net cash after repayment of associated bank
loans.
In October 2024 Avation agreed a
lease extension for a fifteen-year-old Airbus A320 at a lease rate
that exceeds the previous rental rate for the aircraft.
In November 2024 the Company sold a
new ATR 72-600 on delivery from the manufacturer, generating net
cash proceeds for around US$ 5 million. The net proceeds from sale
have been deployed to fund pre-delivery payments on Avation's
orderbook for additional ATR aircraft.
As of 19 December 2024, Avation owns
a fleet of 32 commercial aircraft leased to 15 airlines in 13
countries. The average age of the fleet is 7.8 years, and the
average remaining lease term is 3.8 years.
The Company has three leased
aircraft being returned in 2025. All three aircraft have been
placed with three new airline lessees for subsequent operation.
There are no further lease aircraft being returned until
2026.
The Company has two new ATR72-600
aircraft being delivered in 2025. For the first aircraft, the
Company signed a twelve-year lease agreement with a Japanese
airline. This aircraft is currently scheduled for delivery from the
manufacturer in October 2025. The second aircraft has been placed
with an airline in Korea. Both of the two new aircraft have been
placed with two new airline customers. The next available new
aircraft scheduled for delivery is in 2026.
With all returning aircraft and new
aircraft placed for 2025, the Company will consider
opportunistically acquiring additional aircraft in the secondary
market to further expand the fleet in 2025.
Finance Update
Avation has continued to make
progress with collections of Covid era related airline
arrears. Total arrears have been reduced by around US$ 6.4
million since 30 June 2024. The management team remains highly
focussed on collections of remaining arrears.
The Company recently issued
3,692,262 fully paid ordinary shares pursuant to the exercise of
employee and bondholder share warrants, providing total proceeds of
GBP 4.8 million (equivalent to about US$ 6.1
million).
Avation currently has US$ 336.8
million secured bank loans outstanding which bear interest at an
average interest rate of 4.86%.
Avation also has US$ 331.6 million
outstanding 9.00%/8.25% Senior PIK Toggle Notes which have a
maturity of October 2026.
Total cash and bank balances
increased by US$ 18.6 million since 30 June 2024 to US$ 136.5
million as at the 13th of December 2024.
The Company repurchased on the
17th of December 2024 a total of 7,800,000 shares
representing 10.45% of the outstanding shares for 150p each. These
repurchased shares will be held in treasury. The Company had a view
that the most undervalued security was the ordinary shares and that
this repurchase was the most value accretive.
Executive Chairman, Jeff Chatfield,
said:
"The commercial aviation market
continues to perform well, underpinned by strong demand for
passenger air travel and continued supply chain issues restricting
the supply of new aircraft. Avation is working to improve
shareholder value by repurchasing shares and reinstating dividends.
Avation is well placed to benefit from supportive industry
dynamics, both in terms of growth by the placement of ten new ATR
aircraft which we have ordered for delivery between 2025 and 2028
and by remarketing existing aircraft when their current leases
expire, Avation is therefore confident in its ability to place the
remaining aircraft in its orderbook at lease rates which will
generate value for shareholders."
-ENDS-
Enquiries:
Avation PLC - Jeff Chatfield,
Executive
Chairman
+65 6252 2077
Avation welcomes shareholder
questions and comments and advises the email address is:
investor@avation.net
Notes to Editors:
Avation PLC is an aircraft leasing
company, headquartered in Singapore, owning and managing a fleet of
commercial passenger aircraft which it leases to airlines around
the world. More information on Avation is available at
www.avation.net.
