TIDMDNA3
RNS Number : 9475V
Doric Nimrod Air Three Limited
16 December 2021
DORIC NIMROD AIR THREE LIMITED (the "Company")
(Legal Entity Identifier: 213800BMYMCBKT5W8M49)
HALF-YEARLY FINANCIAL REPORT
The Board of the Company is pleased to announce its results for
the period from 1 April 2021 to 30 September 2021.
To view the Company's half-yearly financial report please follow
the link below:
http://www.rns-pdf.londonstockexchange.com/rns/9475V_1-2021-12-16.pdf
In addition, to comply with DTR 6.3.5(1) please find below the
full text of the half yearly financial report.
The half-yearly financial report will also shortly be available
on the Company's website www.dnairthree.com .
For further information, please contact:
For administrative and company information:
JTC Fund Solutions (Guernsey) Limited
+44 (0) 1481 702400
For shareholder information:
Nimrod Capital LLP
+44 (0) 20 7382 4565
OF ANNOUNCEMENT
E&OE - in transmission
Doric Nimrod Air Three Limited
Half-Yearly Financial Report
For the period from 1 April 2021 to 30 September 2021
DEFINITIONS
" Administrative Subordinated Administrative Shares
Shares"
"AED" United Arab Emirates Dirham
"AGM" Annual General Meeting
"Amedeo" or Amedeo Management Limited
the Asset Manager
"Articles " Company's Articles of Incorporation
"ASKs" Available Seat Kilometres
"Asset(s)" or Airbus A380 Aircraft owned by DNA 3
the "Aircraft"
"BA" British Airways
"Board " Company's Board of directors
"Bond(s)" Borrowings obtained by the Group to part-finance
the acquisition of Aircraft
"CDS" Credit Default Swaps
" Certificates" DNA Alpha Pass Through Certificates issued
in August 2013
"Chair" Chair of the Board
"Code " The UK Corporate Governance Code
"CORSIA " Carbon Offsetting and Reduction Scheme for
International Aviation
"DGTRs " Disclosure Guidance and Transparency Rules
"Distribution Distribution of 2.0625 Pence per Share per
Policy " Quarter
"DNA3" or the Doric Nimrod Air Three Limited
"Company"
"DNA Alpha" DNA Alpha Limited
"DWC" Dubai World Central International Airport
"DXB" Dubai International Airport
"EETC" or "Certificates" Enhanced Equipment Trust Certificates
"Emirates" or the Emirates Airline
"Lessee"
"EPS or LPS" Earnings / Loss Per Share
"ESG" Environmental, Social and Governance
"EU" European Union
"EU ETS" European Union Emission Trading Scheme
"FCA" Financial Conduct Authority
"FRC" Financial Reporting Council
"FVOCI" Fair Value through Other Comprehensive Income
"FVTPL" Fair Value through Profit or Loss
"GBP", "GBP" or Pound Sterling
"Sterling"
"GFSC" Guernsey Financial Services Commission
"Grant Thornton" Grant Thornton Limited
"Group" The Company and its Subsidiaries
"IAS 1" International Accounting Standard 1 - Presentation
of Financial Statements
"IAS 8" International Accounting Standard 8 - Accounting
Policies
"IAS 16" International Accounting Standard 16 - Property,
Plant and Equipment
"IAS 36" International Accounting Standard 36 - Impairment
of Assets
"IASB " International Accounting Standards Board
"IATA " International Air Transport Association
"ICAO " International Civil Aviation Organization
" IFRIC " International Financial Reporting Interpretations
Committee
"IFRS " International Financial Reporting Standards
"IFRS 16 " IFRS 16 - Leases
"IPCC " Intergovernmental Panel on Climate Change
"ISAE 3402 " International Standard on Assurance Engagement
3402
"ISTAT " International Society of Transport Aircraft
Trading
"JTC " or "Secretary JTC Fund Solutions (Guernsey) Limited
" or "Administrator
"
"Law " The Companies (Guernsey) Law, 2008, as Amended
"Lease(s)" Lease of Aircraft to Emirates
"LGW " London Gatwick Airport
"LSE" London Stock Exchange's
"MAG" Malaysia Aviation Group
"NBV" Net Book Value
"Nimrod" or "Corporate Nimrod Capital LLP
and Shareholder
Adviser"
"Pandemic" COVID-19 Pandemic
"Period" 1 April 2021 until 30 September 2021
"PIES" Public Interest Entities
"PLF" Passenger Load Factor
" Registrar" JTC Registrars Limited
"RPKs" Revenue Passenger Kilometres
"SAF" Sustainable Aviation Fuel
" SFS" Specialist Fund Segment
" Shareholders" Shareholders of the Company
" Shares" Ordinary Preference Shares of the Company
"Share Capital" Share Capital of the Company
" SIA" Singapore Airlines
" SID" Senior Independent Director
"Subsidiary" DNA Alpha Limited
"UAE" United Arab Emirates
"UK" United Kingdom
"USD" or "$" US Dollars
"VIU" Value-In-Use
"WACC" Weighted Average Costs of Capital
SU MM A RY I NF O R M A T ION
Listing Specialist Fund Segment of the London
Stock Exchange's Main Market
Ticker DNA3
--------------------------------------------
Share Price 37.0 pence
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Market Capitalisation GBP 81.4 million
--------------------------------------------
Initial Debt USD 630 million
--------------------------------------------
Outstanding Debt Balance USD 113.6 million (18% of Initial
Debt)
--------------------------------------------
Current and Targeted Dividend 2.0625 pence per quarter per share
(8.25 pence per annum)
--------------------------------------------
Earned Dividends 63.59p
--------------------------------------------
Dividend Yield 22.30%
--------------------------------------------
Dividend Payment Dates January, April, July, October
--------------------------------------------
Ongoing Charges (OCF) 2.3%
--------------------------------------------
Currency GBP
--------------------------------------------
Launch Date/Price 2 July 2013 / 100 pence
--------------------------------------------
Average Remaining Lease Duration 4 years 1 month
--------------------------------------------
Incorporation and Domicile Guernsey
--------------------------------------------
Aircraft Registration Number A6 - EEK (29 August 2025),
(Lease Expiry Dates) A6 - EEO (29 October 2025),
A6 - EEM (14 November 2025),
A6 - EEL (27 November 2025)
--------------------------------------------
Asset Manager Amedeo Management Limited
--------------------------------------------
Corporate and Shareholder Nimrod Capital LLP
Advisor
--------------------------------------------
Administrator JTC Fund Solutions (Guernsey) Limited
--------------------------------------------
Auditor Grant Thornton
--------------------------------------------
Market Makers finnCap Ltd,
Investec Bank,
Jefferies International Ltd,
Numis Securities Ltd,
Shore Capital Ltd,
Winterflood Securities Ltd
--------------------------------------------
SEDOL, ISIN, LEI B92LHN5, GG00B92LHN58, 213800BMYMCBKT5W8M49
--------------------------------------------
Year End 31 March
--------------------------------------------
Stocks & Shares ISA Eligible
--------------------------------------------
Website www.dnairthree.com
--------------------------------------------
Please note that the Group has determined that the operating
leases on the Assets are for 12 years based on an initial term of
10 years followed by an extension term of 2 years. For the purpose
of this report the Leases are all referred to as 12 year
leases.
COMPANY OVERVIEW
DNA3 is a Guernsey company incorporated on 29 March 2012.
Pursuant to the Company's Prospectus dated 20 June 2013, the
Company, on 2 July 2013, offered its Shares for issue by means of a
placing and raised approximately GBP211 million by the issue of
Shares at an issue price of 100 pence per share. The Company's
Shares were admitted to trading on the SFS on 2 July 2013.
As at 30 November 2021, the last practicable date prior to the
publication of this report, the Company's total issued Share
Capital consisted of 220,000,000 Shares and these Shares were
trading at 36.50 pence per Share.
Investment Objectives and Policy
The Company's investment objective is to obtain income returns
and a capital return for its Shareholders by acquiring, leasing and
then selling Aircraft. To pursue its investment objective, the
Company has used the net proceeds of placings and other equity
capital raisings, together with debt facilities (or instruments),
to initially acquire four Airbus A380 Aircraft which are leased to
Emirates, the national carrier owned by The Investment Corporation
of Dubai based in Dubai, UAE.
DNA Alpha
The Company has one wholly-owned subsidiary: DNA Alpha which
holds the Assets for the Company.
The first Asset was acquired by DNA Alpha on 29 August 2013 for
a purchase price of $245 million. Upon delivery, DNA Alpha entered
into an operating lease with Emirates, pursuant to which the first
Asset has been leased to Emirates for an initial term of 10 years,
ending August 2023, with an extension period of two years ending
August 2025.
The second Asset was acquired by DNA Alpha on 29 October 2013
for a purchase price of $245 million. Upon delivery, DNA Alpha
entered into an operating lease with Emirates, pursuant to which
the second Asset has been leased to Emirates for an initial term of
twelve years, with fixed lease rentals for the duration. The
initial lease is for 10 years ending October 2023, with an
extension period of two years ending October 2025.
The third Asset was acquired by DNA Alpha on 14 November 2013
for a purchase price of $245 million. Upon delivery, DNA Alpha
entered into an operating lease with Emirates, pursuant to which
the third Asset has been leased to Emirates for an initial term of
twelve years, with fixed lease rentals for the duration. The
initial lease is for 10 years ending November 2023, with an
extension period of two years ending November 2025.
The fourth Asset was acquired by DNA Alpha on 27 November 2013
for a purchase price of $245 million. Upon delivery, DNA Alpha
entered into an operating lease with Emirates, pursu ant to which
the fourth Asset has been leased to Emirates for an initial term of
twelve years, with fixed lease rentals for the duration. The
initial lease is for 10 years ending November 2023, with an
extension period of two years ending November 2025.
DNA Alpha acquired the Assets, using a combination of a portion
of the proceeds of the issue of the Ordinary Shares by the Company
together with the proceeds of the sale of equipment notes issued by
DNA Alpha and the initial rent payment pursuant to the relevant
operating Leases. The equipment notes were acquired by two separate
pass through trusts using the proceeds of their issue of EETCs as
detailed within the offering circular issued by DNA Alpha dated 10
July 2013.
Further information about the construction of these Leases is
available in note 12 to the Financial Statements.
The EETCs, with an aggregate face amount of approximately $630
million, were admitted to the official list of the Euronext Dublin
and to trading on the Main Securities market thereof and will
mature on 30 May 2025.
Emirates bears all costs (including maintenance, repair; and
insurance) relating to the Aircraft during the lifetime of the
Lease
Distribution Policy
The Company currently targets a distribution of 2.0625 pence per
Share per quarter.
There can be no guarantee that dividends will be paid to
Shareholders and, if dividends are paid, as to the timing and
amount of any such dividend. There can also be no guarantee that
the Company will, at all times, satisfy the solvency test required
to be satisfied pursuant to section 304 of the Law, enabling the
directors to effect the payment of dividends.
Performance Overview
All payments by Emirates have been made in accordance with the
terms of the respective Leases.
During the Period and in accordance with the Distribution Policy
the Company declared two interim dividends of 2.0625 pence per
Share each. One interim dividend of 2.0625 pence per Share was
declared after the Period. Further details of dividend payments can
be found on page 35.
Return of Capital
The Company intends to return to Shareholders the net capital
proceeds if and when the Company is wound up (pursuant to a
shareholder resolution, including the Liquidation Resolution),
subject to compliance with the Articles and the applicable laws
(including any applicable requirements of the solvency test
contained therein).
Liquidation Resolution
Although the Company does not have a fixed life, the Articles
require that the directors convene a general meeting of the Company
in November 2026 where an ordinary resolution will be proposed that
the Company proceed to an orderly wind-up at the end of the term of
the Leases. In the event that the liquidation resolution is not
passed, the directors will consider alternatives for the future of
the Company, and shall propose such alternatives at a general
meeting of the Members, including re-leasing the Assets, or selling
the Assets and reinvesting the capital received from the sale of
the Assets in other aircraft.
CHAIR'S STATEMENT
During the Period the Company has declared and paid two
quarterly dividends of 2.0625 pence per Share each, a rate of
dividend payment equivalent to 8.25 pence per Share per annum.
The Company's investment objective is to obtain income returns
and a capital return for its Shareholders by acquiring, leasing and
then selling Aircraft. The structures of the operating leases
relating to the Company's four Aircraft are described on pages 5 to
6.
The debt portion of the funding is designed to be fully
amortised over the term of the Leases, which would leave the
Aircraft unencumbered on the conclusion of the ultimate Lease.
Emirates bears all costs (including maintenance, repair and
insurance) relating to the Aircraft during the lifetime of the
Leases. At 30 November 2021, the latest practical date prior to
this report, the Company had outstanding debt associated with the
Aircraft totaling USD 113.6 million (18% of the initial balance).
At 30 November 2021 the share price was 36.5 pence, representing a
market capitalisation of GBP 80.3 million based on the 220,000,000
Shares in issue. The Company's first lease expiry falls due in
August 2025.
All payments by Emirates during the Period and throughout the
Lease have been made in accordance with the terms of the Lease. All
four of the Company's Aircraft were put into storage in March 2020.
MSNs 132 and 136 are currently stored at DWC. MSNs 133 and 134 have
been stored at DXB since July 2021.
The emergence of the Omicron variant in late November 2021 has
significantly increased uncertainty over the path of recovery of
global air passenger traffic in the next few months, according to
an IATA report from early December, as it may result in countries
reimposing more extensive travel restrictions again. Israel and
Japan have become the first to shut their borders for foreign
travellers.
There are currently 70 A380 Aircraft in service globally of
which 57 are being operated by Emirates. Emirates highlighted in
late September that plans to restore 70% of its capacity by the end
of 2021 are on track with the return to service of more than 50
A380 aircraft. Around the same time Emirates also embarked upon a
worldwide campaign to recruit 3,000 cabin crew and 500 airport
services employees to join its Dubai hub over the following six
months. Pleasingly, several other A380 operators have stated plans
to reintroduce the A380 to their fleets including British Airways,
Singapore Airlines, Qatar Airways and Qantas Airways.
In its recent half-year results Emirates Airline reported that
revenue rose by 86%, supported by increasing passenger demand and
continuous strong cargo business. The airline reported EBITDA
recovered to USD 1.4 billion but posted an overall loss of USD 1.6
billion. In the first half of 2021-22, the Government of Dubai
injected a further USD 681 million into Emirates Group by way of an
equity investment and they continue to support the airline on its
recovery path. The airline reported a cash position of USD 3.9
billion as at 30 September 2021. His Highness Sheikh Ahmed bin
Saeed Al Maktoum, Chairman and Chief Executive, Emirates noted "Our
cargo transport and handling businesses continued to perform
strongly, providing the bedrock upon which we were able to quickly
reinstate passenger services.
While there's still some way to go before we restore our
operations to pre-Pandemic levels and return to profitability, we
are well on the recovery path with healthy revenue and a solid cash
balance at the end of our first half of 2021-22."
Whilst Emirates do not have a formal credit rating, they have
previously issued unsecured USD bonds with maturities in 2023, 2025
and 2028. At the time of writing these instruments are trading at
approximately 101,102.7 and 103 cents respectively, equivalent to
USD running yields in the range of roughly 3.8% to 4.4%. Further
details on Emirates and the A380 can be found in the Asset
Manager's report by Amedeo.
The Company's first Lease with Emirates expires in August 2025,
approximately three years and eight months from now.
The redelivery procedure for a widebody Aircraft is complex and
highly technical and as we move closer to the first lease expiry
your Board will provide more details on the high-level
considerations and also the implications of the various potential
outcomes for Shareholders.
Amedeo continues to monitor the Leases and is in frequent
contact with the Lessee and reports regularly to the Board. Nimrod
continues to liaise with Shareholders on behalf of the Board and
has provided valuable feedback on the views of Shareholders in the
current climate.
Shareholders should note that although the underlying cash flows
received and paid during the Period have been received and paid as
anticipated and in accordance with contractual obligations; it may
not be obvious from the accounts that this is so because of the
application of the accounting treatments for foreign exchange,
rental income and finance costs mandated by IFRS.
For instance, the entirety of the rental income that is
receivable under the 10-year Leases followed by an extension term
of 2-years (including advance rental received as part of the
initial acquisition of the Assets) is credited evenly over each of
the 144 months of the Leases. However the actual rental income has
been received in advance of this uniform pattern in order to match
and fund the accelerated payment down of debt. Thus as at 30
September 2021, 86% of income receivable under the Leases has been
received, which has funded the payment down to 82% initial
borrowings, whereas under the relevant accounting standard only 65%
may be recognised. This mismatch in timing between the receipt and
recognition of rental income results in a deferred income creditor
of GBP126.8 million or 58 pence per Share in the 30 September 2021
balance sheet. This is an artificial accounting adjustment in the
sense that it does not represent a liability to pay GBP126.8
million to third parties. The faster that income is received and
debt repaid the larger the resultant creditor producing a reduction
in reported net asset value.
Similarly, the relevant accounting standards require that
transactions denominated in currencies other than the presentation
currency (including, most importantly, the cost of the Aircraft)
are translated into the presentation currency at the exchange rate
ruling at the date of the transaction whilst monetary items
(including also very significantly, the outstanding borrowings and
deferred income creditor) are translated at the rate prevailing on
the reporting date. The result is that the figures sometimes show
large mismatches which are reported as unrealised foreign exchange
differences - although the distortive effect becomes less
pronounced over time as debt is paid down.
On an on-going basis and assuming the lease rental is received,
and the Bond payments are made as anticipated, such exchange
differences do not reflect the commercial substance of the
situation in the sense that the key transactions denominated in USD
are in fact closely matched. Rental income received in USD is used
to make Bond repayments due which are likewise denominated in USD.
Furthermore, the USD lease rentals and Bond repayments are fixed at
the inception of the respective Lease and are very similar in
amount and timing .
The Board encourages Shareholders to read the Company's
quarterly fact sheets which we believe provide a great deal of
interesting information. We hope these regular reports, in addition
to the communication you receive from Nimrod, are useful and
informative. The directors welcome Shareholder engagement and
feedback and encourage you to contact Nimrod to request a meeting
or to relay any feedback.
Finally, on behalf of the Board, I would like to thank our
service providers for all their help and, most importantly, all
Shareholders for their continuing support of the Company during
these difficult times. I look forward to keeping all Shareholders
up to date with further progress.
Charles Wilkinson
Chair
16 December 2021
ASSET MANAGER'S REPORT
At the request of the directors of the Company, this commentary
has been provided by the Asset Manager of the Company. The report
reflects the information available at the end of September 2021
unless otherwise noted.
COVID-19
The Pandemic continues to impact private and economic life
worldwide. The consequences of COVID-19 are far reaching and
changing at a significant pace. The impact of this Pandemic on the
aviation sector has been significant with a large part of the
global passenger aircraft fleet grounded. This Asset Manager's
report is exclusively based on known facts at the time of writing
and does not seek to draw on any speculation about any possible
future, long-term impacts of the Pandemic on the aviation sector or
the Company specifically and should be read in such context.
1. The Assets
The Company acquired four Airbus A380 Aircraft by the end of
November 2013. Since delivery, each of the four Aircraft has been
leased to Emirates - the national carrier owned by the Investment
Corporation of Dubai, based in Dubai, UAE - for a term of 12 years
based on an initial term of 10 years followed by an extension term
of 2 years with fixed lease rentals for the duration. In order to
complete the purchase of the Aircraft, DNA Alpha Ltd, a wholly
owned subsidiary of the Company, issued two tranches (Class A &
Class B) of EETC - a form of debt security - in July 2013 in the
aggregate face amount of USD 630 million. The Certificates are
admitted to the official list of the Euronext Dublin and to trading
on the Main Securities market thereof. DNA Alpha used the proceeds
from both the Equity and the Certificates to finance the
acquisition of the four new Airbus A380 aircraft.
Due to the effects of COVID-19, all four Aircraft were put into
storage in March 2020. MSNs 132 and 136 were temporarily
transferred from DWC to DXB in June and July 2021, respectively,
before being returned to DWC in July and August 2021, respectively.
MSNs 133 and 134 returned to service in late November 2020 but were
subsequently placed back into storage at DWC in late January 2021.
Both Aircraft flew briefly within Dubai in July 2021 before
returning to storage in DWC.
Aircraft utilisation for the period from delivery of each Airbus
A380 until the end of September 2021 was as follows:
MSN Delivery Date Flight Hours Flight Cycles Average Flight
Duration
132 29/08/2013 31,010 3,622 8 h 35 min
-------------- ------------- -------------- ---------------
133 27/11/2013 31,449 3,324 9 h 30 min
-------------- ------------- -------------- ---------------
134 14/11/2013 29,867 3,183 9 h 25 min
-------------- ------------- -------------- ---------------
136 29/10/2013 31,569 3,334 9 h 30 min
-------------- ------------- -------------- ---------------
Maintenance Status
Emirates maintains its A380 aircraft fleet based on a
maintenance programme according to which minor maintenance checks
are performed every 1,500 flight hours, and more significant
maintenance checks (C checks) at 36-month or 18,000-flight hour
intervals, whichever occurs first.
Due to the continuing COVID-19 Pandemic, Emirates has stored the
Aircraft owned by the Group in Dubai. The Lessee has "a
comprehensive aircraft parking and reactivation programme [in
place], that strictly follows manufacturer's guidelines and
maintenance manuals".
In addition, Emirates has enhanced standards and protocols of
their own, to protect and preserve the Assets during the
downtime.
This includes the watertight sealing of all apertures and
openings through which environmental factors - sand, water, birds,
and insects - can find their way inside an aircraft. During
parking, maintenance teams complete periodic checks at different
intervals. Depending on the reactivation date of a specific
aircraft, Emirates might defer due maintenance checks, which are
calendar-based, until that time. This would allow the airline to
make use of the full maintenance interval once the operation of a
specific aircraft resumes. The Aircraft of the Company are in deep
storage condition at this time and could be reactivated within
weeks.
Emirates bears all costs relating to the Aircraft during the
lifetime of the Leases (including for maintenance, repairs and
insurance).
Inspections
The Asset Manager conducted physical inspections and records
audits of the Aircraft as per the below table. Due to the storage
of the Aircraft and the protective measures associated with this,
the inspection of the Aircraft were limited to viewing the outside
of the Aircraft from ground level. The condition of the Aircraft -
to the extent visible - and their technical records were in
compliance with the provisions of the respective lease agreements,
taking into account that the Aircraft were in storage at the moment
of the audit.
MSN Last Inspection MSN Last Inspection
132 11/2020 134 01/2021
---------------- ---- ----------------
133 01/2021 136 01/2021
---------------- ---- ----------------
2. Market Overview
The impact of COVID-19 on the global economy has been severe,
resulting in an estimated contraction in global GDP of 3.5% for
2020, according to the World Bank's latest revision. This is
expected to be followed by a recovery in growth of between 5.6% and
6.0% in 2021. In its latest economic impact analysis from September
2021, the ICAO estimates that the full year 2021 could experience
an overall reduction in seats offered by airlines of 39% to 40%
compared with pre-crisis 2019 levels. However, the actual impact of
COVID-19 on the airline industry will depend on several factors,
including the duration and magnitude of the outbreak and
containment measures, the degree of consumer confidence in air
travel as well as general economic conditions.
The IATA anticipates an airline industry-wide net loss of USD
51.8 billion in 2021, after approximately USD 138 billion in the
previous year, according to its latest estimates from October
2021.
The rebound in global air passenger traffic has continued
through August 2021, supported by vaccine rollouts and a
willingness to travel during the northern hemisphere summer.
In August 2021, industry-wide RPKs fell by 56% compared to
pre-crisis 2019 levels, while industry-wide capacity, measured in
ASKs, contracted by 46.2% compared to pre-crisis 2019 levels. This
resulted in the PLF falling by 15.6 percentage points to 70%. In
comparison to the year prior, RPKs were up 72.9%, ASKs were up
46.9%, and the PLF increased by 10.5 percentage points during the
month of August 2021.
Due to their reliance on international long-haul routes, Middle
Eastern carriers like Emirates continue to experience greater
declines than other regions compared to pre-crisis levels. However,
IATA points out that there was a broad-based improvement in
international markets in August due to growing vaccination rates
and less stringent international travel restrictions in some
regions. RPKs fell 68% in August 2021 compared to pre-crisis 2019
levels. Capacity also fell by 53% during that period.
The result was a 26 percentage points decrease in PLF to 56%.
However, in comparison to the lowest point of the crisis a year
prior, RPKs were up 229%, ASKs were up 123%, and the PLF increased
by 18 percentage points in August 2021.
While IATA notes that the spread of the Delta variant globally
did not have a strong impact on international RPKs in August, other
macroeconomic factors could impact the speed of the recovery in air
travel. IATA states that economic concerns, such as supply chain
congestion, labour shortages, a slowdown in Chinese growth as well
as inflation, could lead to reduced economic activity in the coming
months.
In September 2021 the Biden Administration announced that
travellers from 33 countries would be allowed to enter the US again
from early November, if fully vaccinated and with a negative
COVID-19 test result. The list of countries included the UK,
Ireland, the Schengen Area, Brazil, South Africa, India, and China.
IATA sees "a major step forward" in this announcement and expects
support for the economic recovery, according to Willie Walsh,
IATA's Director General.
The emergence of the Omicron variant in late November 2021 has
significantly increased uncertainty over the path of recovery of
global air passenger traffic in the next few months, according to
an IATA report from early December, as it may result in countries
reimposing more extensive travel restrictions again. Israel and
Japan have become the first to shut their borders for foreign
travellers.
Source: IATA, ICAO
(c) International Air Transport Association, 2021. Air Passenger
Market Analysis August 2021. Outlook for the Global Airline
Industry October 2021. Air Passenger Market Analysis October 2021.
All Rights Reserved. Available on the IATA Economics page.
3. Lessee - Emirates
Network
Emirates' recovery efforts continued through the third quarter
of 2021, coinciding with the easing of entry requirements for
travellers into the UAE. At the same time, other countries, such as
the UK, have also been relaxing their own restrictions on
travellers from the UAE, allowing for a general easing of
restrictions for Emirates' passengers. As a result of such changes,
Emirates has been actively scaling up its operations in key
passenger markets. The carrier now intends to operate 73 weekly
flights to the UK by mid-October and has also begun to restore
routes to Saudi Arabia and Russia. From December, Emirates will
restart flights to LGW with a daily Boeing 777 service, increasing
the number of weekly flights to the UK to 84 by the end of
December. Adnan Kazim, Emirates' Chief Commercial Officer, observed
a surge in demand after the UK simplified travel and is prepared to
accept international vaccination certificates from 55 countries
starting on 4 October.
Emirates has further expanded its network in South Africa
through new codeshare and interline agreements with Airlink and
CemAir as well as in Brazil through a codeshare agreement with
Azul.
On the day of the Biden Administration's decision to lift travel
restrictions to the US from November 2021, Emirates announced plans
to increase frequencies to six of its current 12 US destinations
starting from October. This will result in 78 weekly flights. By
early December Emirates expects to have restored 90% of its
pre-COVID flight frequencies to the US.
Fleet
Throughout the crisis, Emirates' operations largely focused on
the utilisation of its fleet to meet the global demand for cargo
services. As travel restrictions have continued to ease, Emirates
has been redeploying its Boeing 777-300ER and Airbus A380 Aircraft
on newly resumed passenger services as well as up-gauging existing
passenger routes.
A380s already returned to service are primarily of recent
vintage as younger Aircraft usually benefit from more comprehensive
warranty packages, which dwindle the older an Aircraft gets.
Warranties can help an operator to reduce its maintenance
costs.
The carrier has resumed passenger services to over 120
destinations, recovering approximately 90% of its pre-Pandemic
network.
The number of pre-Pandemic A380 destinations is expected to
increase from 16 at present to 27 by the end of November, including
Amsterdam, Barcelona, Dusseldorf, Hamburg, Johannesburg, Madrid,
Milan, Riyadh (subject to government approvals), Sao Paulo, and
Zurich. In addition, Emirates will add Istanbul as an A380
destination for the first time, with services starting from 1
October. Recently restored or up-gauged passenger A380 destinations
include Jeddah, London Heathrow, New York JFK, and Manchester.
By the end of the calendar year, the airline expects that more
than 50 A380 Aircraft will have returned to service, which -
together with its active Boeing 777-300ER fleet - will amount to
70% of its pre-Pandemic capacity.
The table below details the passenger Aircraft fleet activity as
of 30 September 2021:
Passenger Aircraft Fleet Activity
Aircraft Type Grounded In Service
--------- ----------
A380 80 39
--------- ----------
777 1 117
--------- ----------
Total 81 156
--------- ----------
% 34% 66%
--------- ----------
Source: Cirium as of 30 September 2021
After reaching an agreement with Airbus, Emirates now intends to
take delivery of its final Airbus A380 in November 2021, seven
months ahead of the originally planned delivery date in June 2022.
In total, the carrier will have taken delivery of three new A380s
this year, which will bring the fleet to 118 of the type. The three
new A380s will also be equipped with Emirates' new premium-economy
seats in a four-class cabin configuration, giving the carrier a
total of six A380s featuring premium-economy seats. Emirates'
President Sir Tim Clark added: "Emirates will continue to be the
largest operator of this spacious and modern Aircraft for the next
two decades, and we're committed to ensuring that the Emirates A380
experience remains a customer favourite with ongoing investments to
enhance our product and services."
Key Financials
In the first half of the financial year ending 31 March 2022,
Emirates recorded a net loss of AED 5.8 billion (USD 1.6 billion)
compared to AED 12.6 billion (USD 3.4 billion) loss for the same
period in the previous year. However, revenues increased 86% to AED
21.7 billion (USD 5.9 billion), with the increasing passenger
demand and strong cargo demand aiding the recovery.
During the first half of the 2021/22 financial year, Emirates
carried 6.1 million passengers up 319% from the same period last
year. As more countries eased travel and flight restrictions,
Emirates increased capacity by 250% and its passenger traffic
increased 335%. This resulted in the average passenger seat load
factor recovering to 47.9% (compared with last year's Pandemic
figure of 38.6%).
Given the substantial increase in flight operations during the
six-month period up to end of September 2021, Emirates' operating
costs increased by 22% against an overall capacity growth of
66%.
The carrier's fuel costs more than doubled compared to the same
period last year, primarily due to an 81% higher fuel uplift in
line with increasing flight operations as well as an increase in
average oil prices. Fuel, which had been the largest component of
the Emirates' operating cost prior to the Pandemic, accounted for
20% of operating costs compared to only 11% in the same period last
year.
The recovery in Emirates' operations during the first six months
of the 2021/22 financial year led to an improved EBITDA of AED 5.0
billion (USD 1.4 billion) compared to AED 290 million (USD 79
million) for the same period last year.
Demand for air freight also remained strong. T he volume of
cargo uplifted between April and September 2021 increased by 39% to
1.1 million tonnes, restoring Emirates' cargo operation to 90% of
its pre-Pandemic (2019) levels by volume handle.
As of 30 September 2021, Emirates' total liabilities decreased
by 2.2% to AED 128.7 billion (USD 35.1 billion USD) compared to the
end of the previous financial year. Total equity decreased by 14.7%
to AED 17.2 billion (USD 4.7 billion). Emirates' equity ratio stood
at 11.8% and its cash position amounted to AED 14.2 billion (USD
3.9 billion) at the end of September 2021. In comparison, the
carrier had AED 15.1 billion (USD 4.1 billion) in cash assets at
the end of the 2020/21 financial year. The cash flow from operating
activities remained positive at AED 6.9 billion (USD 1.9
billion).
In the first half of the 2021/22 financial year, the carrier's
ultimate shareholder, the Government of Dubai, injected a further
AED 2.5 billion (USD 681 million) into the Emirates Group by way of
an equity investment, demonstrating continued support for the
airline on its recovery path. On the ongoing performance of
Emirates in light of the global Pandemic, HH Sheikh Ahmed bin Saeed
Al Maktoum, chairman and chief executive of Emirates, stated: " Our
cargo transport and handling businesses continued to perform
strongly, providing the bedrock upon which we were able to quickly
reinstate passenger services. While there's still some way to go
before we restore our operations to pre-Pandemic levels and return
to profitability, we are well on the recovery path with healthy
revenue and a solid cash balance at the end of our first half of
2021-22."
In mid-September 2021 the airline announced its intention to
hire 3,000 flight attendants and 500 services personnel for its DXB
operations over the next six months. After Emirates had reduced its
workforce by about 15% of its pre-Pandemic level in an attempt to
reduce the cost base during the Pandemic, additional staff are
needed to support the ramp-up of its operations.
As at the end of September 2021, Emirates has outstanding USD
debt issuances with maturities in 2023, 2025, and 2028. These
respective bonds were all trading at above par (100 cents) and with
running yields ranging from approximately 3.9% to 4.4% in USD.
There has also been no upward pressure on yields. This level of
yields does not appear to indicate any significant financial stress
to the issuer. In its latest annual financial report, the auditor
PricewaterhouseCoopers issued an unqualified audit report and the
airline stated it "remains confident to meet our financial
commitments as they fall due in the coming year and beyond through
proactive working capital management and utilisation of available
credit lines and facilities".
In early November 2021 Emirates' President Sir Tim Clark shared
the news that the airline had just returned to profit and also
achieved a cash surplus. With about 60,000 to 70,000 daily
passengers the airline still has some way to go before reaching its
pre-Pandemic level of 170,000 passengers. However, higher yields
with its passenger and cargo operations allowed for the turnaround.
During the Pandemic Emirates was also able to double its cargo
operations, benefiting from a surge in demand for air cargo
transport.
Source: Airline Ratings, Bloomberg, Cirium, Emirates, Khaleej
Times, Simple Flying
4. Aircraft - A380
As of the end of September 2021, the global A380 fleet consisted
of 240 planes with airline operators. Only 47 of these aircraft
were in service. The remainder of the fleet is currently parked due
to COVID-19. The fifteen operators are Emirates (119), Singapore
Airlines (19), Deutsche Lufthansa (14), Qantas (12), British
Airways (12), Korean Air Lines (10), Etihad Airways (10), Qatar
Airways (10), Air France (8), Malaysia Airlines (6), Thai Airways
(6), Asiana Airlines (6), China Southern Airlines (5), and All
Nippon Airways (3). Another three aircraft are on order.
In April 2021, Etihad chief executive Tony Douglas disclosed
that the carrier has decided to ground its 10 Airbus A380
"indefinitely" as it remodels its fleet around the Boeing 787 and
the Airbus A350 . He added that the A380 is "a wonderful product...
but they are no longer commercially sustainable. So, we have taken
the difficult decision to park those machines up indefinitely". As
a part of its streamlining process, the carrier has also already
removed its Airbus A330 aircraft from service and intends to remove
its Boeing 777-300ER aircraft from service by the end of the
year.
Also in April, British Airways chief executive Sean Doyle stated
that the Airbus A380 will continue to play a role in the carrier's
fleet strategy, following the retirement of British Airways' Boeing
747 aircraft in 2020, which represented a large portion of its
pre-COVID capacity. The A380 will serve to offer flexibility on a
range of routes, especially to the USA and Asia, while also
maximising efficiency at carrier's slot-constrained London Heathrow
base, according to Doyle.
In May 2021, MAG, Malaysia Airlines' parent company, announced
its intention to retire its Airbus A380 fleet "in the coming
months". The retirement of the A380 is a part of MAG's larger
reorganisation plan, known as "Long-Term Business Plan 2.0". Under
the plan, MAG's pilgrimage-focused subsidiary Amal will cease
flying A380s and will instead operate A330-200 aircraft.
In August 2021, Qantas announced plans to return five Airbus
A380s to service in the second half of 2022, a year ahead of
schedule. The aircraft are scheduled to operate between Sydney and
Los Angeles from July 2022 as well as between Sydney and London
(via Singapore) from November 2022. Qantas CEO Alan Joyce stated
that the carrier could return five additional A380s to service by
early 2024, depending on the market recovery, but its remaining two
A380s will be retired "because they will be surplus to
requirements".
In September 2021, Lufthansa's final Airbus A380 arrived in
Teruel, Spain for storage. The German airline group previously
confirmed that its 14 A380s will not be returning to service as it
intends to use the Pandemic as an opportunity to implement a major
reorganisation of its long-haul fleet.
SIA has repatriated three of its A380s in 2021 from storage in
Alice Springs, Australia in order to conduct scheduled maintenance.
The carrier stated: "This movement is part of the ongoing
management of our fleet, ensuring we remain nimble, flexible, and
prepared to deploy capacity to markets as the demand warrants."
After a Pandemic-related grounding of its entire A380 fleet for
about 20 months, the carrier wants to return the superjumbo to the
skies and intends to operate daily A380 flights between Singapore
and London from 18 November 2021.
To get the crews certified for the A380 once again, SIA has
scheduled daily flights between Singapore and Kuala Lumpur for a
period of one month, starting in early November. The flight time
between these two destinations is only about 30 minutes.
In late September 2021, Qatar announced that at least five of
its ten Airbus A380s will resume service from November this year in
order to address the increasing demand for flights while 13 of the
carrier's Airbus A350 jets remain grounded over claims of fuselage
degradation.
Early in the Pandemic, the airline had withdrawn all of its
A380s from service, declared a permanent retirement for five of
them and later admitted that they never wanted to fly any of its
A380s again.
However, given the latest capacity squeeze Qatar's CEO Akbar Al
Baker didn't want to rule out that all ten A380s could be
reactivated, as the shortfall in A350 capacity is leaving the
carrier roughly 4,000 seats short of its required passenger
capacity.
In October 2021, BA announced it will return some of its A380s
to service before the end of this year. UK's flag carrier plans to
re-familiarise its crews on short-haul European connections, before
operating the superjumbos on routes to Los Angeles, Miami, and
Dubai in December. This move is an acceleration of the airline's
previous plans to reintroduce the A380 in March 2022. Recently BA
extended its maintenance contract for all 12 of its A380s with
Lufthansa Technik until at least August 2027.
Source: AeroTime, Cirium, Executive Traveller, One Mile at a
Time, Simple Flying
DIRECTORS
As at 30 September 2021 the Company had four directors all of
whom were independent and non-executive.
Charles Edmund Wilkinson - Chair of the Company and of the
Nomination Committee
Charles Wilkinson is a solicitor who retired from Lawrence
Graham LLP in March 2005. While at Lawrence Graham he specialised
in corporate finance and commercial law, latterly concentrating on
investment trust and fund work.
Charles is Chair of Doric Nimrod Air One Limited and a director
of Doric Nimrod Air Two Limited. Charles is also a director of
Landore Resources Ltd, a Guernsey based mining exploration company.
He is resident in Guernsey.
Geoffrey Alan Hall - Chair of the Audit Committee
Geoffrey Hall has extensive experience in asset management,
having previously been Chief Investment Officer of Allianz
Insurance plc, a major UK general insurance company and an
investment manager at HSBC Asset Management, County Investment
Management, and British Railways Pension Funds. Geoffrey is also a
director and Chair of the Audit Committee of Doric Nimrod Air One
Limited and Chair of Doric Nimrod Air Two Limited.
Geoffrey earned his master's degree in Geography at the
University of London and is an associate of the CFA Society of the
UK. He is resident in the United Kingdom.
Suzanne Elaine Procter - SID
Suzanne Procter brings over 38 years' experience in financial
markets, with specific expertise in asset management. She was
previously a non-executive director of TR Property Investment Trust
plc, an investment company listed on the FTSE 250 index. Her
executive roles included Partner and member of the Executive
Management Committee at Cantillon Capital Management LLC, Managing
Director of Lazard Asset Management, Head of Institutional Sales at
INVESCO Asset Management, Director and Head of Fixed Income
Business at Pictet International Management Ltd and Head of Fixed
Income at Midland Montagu Asset Management.
Suzanne is also the SID of Doric Nimrod Air One Limited and
Doric Nimrod Air Two Limited. She is resident in the United
Kingdom.
Andreas Josef Tautscher
Andreas Tautscher brings over 31 years' financial services
experience. He serves as a non-executive director and member of the
Audit Committee of MJ Hudson PLC, a Jersey based holding company
whose shares are traded on the AIM Market of the London Stock
Exchange. He is also a director of Arolla Partners Limited, a
leading independent director services business in the Channel
Islands. From 1994 to 2018 Andreas held various roles at Deutsche
Bank and was most recently CEO of the Channel Islands and Head of
Financial Intermediaries for EMEA. He was previously a
non-executive director of the Virgin Group. Andreas qualified as a
Chartered Accountant in 1994.
Andreas is also Chair of the Audit Committee of Doric Nimrod Air
Two Limited and a director of Doric Nimrod Air Three Limited. He is
resident in Guernsey.
I N T ER IM M A N A GEMENT REPORT
A description of important events which have occurred during the
Period their impact on the performance of the Group as shown in the
Consolidated Financial Statements and a description of the
principal risks and uncertainties facing the Group is given in the
Chair's Statement, Asset Manager's Report, and the Notes to the
Consolidated Financial Statements contained on pages 25 to 47 and
are incorporated here by reference.
There were no material related party transactions which took
place in the Period, other than those disclosed at note 23 of the
Notes to the Consolidated Financial Statements.
P ri nc i p al R i sks and U n certa i nti es
The principal risks and uncertainties faced by the Company for
the remaining six months of the financial year are unchanged from
those disclosed in the Company's Consolidated Annual Financial
Report for the year ended 31 March 2021.
G o i n g Concern
The Group's principal activities are set out within the Company
Overview on pages 5 to 6. The financial position of the Group is
set out on page 22. In addition, note 20 to the Consolidated
Financial Statements includes the Group's objectives, policies and
processes for managing its capital, its financial risk management
objectives and its exposures to credit risk and liquidity risk.
The directors in consultation with the Asset Manager are
monitoring the continuous effect of the Pandemic generally on the
aviation industry and specifically on the Group's Aircraft values
and the financial wellbeing of its Lessee both now and in the
future. The Pandemic continues to have a pervasive impact on the
global economy and it remains possible that the Group's future
performance could be impacted in this prolonged period of
uncertainty. In many jurisdictions restrictions on the ability of
people to travel still adversely affect the airline sector, and by
extension the Aircraft leasing sector. The risk therefore remains
that some airlines may not be able to pay rent as it falls due. The
impact of the Pandemic on the aviation industry has been
significant with more than 60% of the global passenger aircraft
fleet temporarily grounded back in April 2020. This number has
decreased to about 22% at the time of writing, but is still
materially higher than the historical average. These factors,
together with wider economic uncertainty and disruption, have had
an adverse impact on the future value of the Aircraft owned by the
Group, and could also negatively impact the sale, re-lease,
refinancing or other disposition of the relevant Aircraft.
Given the prolonged impact of the Pandemic, increased lessee
counterparty credit risk remains in existence and there could be
requests for lease rental deferrals. Reduced rents receivable under
the Leases may not be sufficient to meet the fixed loans or
equipment note interest and regular repayments of debt scheduled
during the life of each Bond and equipment note and may not provide
surplus income to pay for the Group's expenses and permit the
declaration of dividends.
The option to remarket the Aircraft following a potential event
of default by the Lessee has not been taken into account. The
period of time necessary to successfully complete such a process is
beyond the twelve months forecasting horizon of the going concern
considerations. This applies in particular in times of COVID-19, as
various restrictions are still in place to contain the
Pandemic.
The directors consider that the going concern basis of
accounting remains appropriate. Based on current information the
directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future, although the risk to this is clearly higher compared to a
pre-COVID-19 environment.
Whilst there is some uncertainty as to the airline industry in
general, and specifically Emirates' financial position and credit
risk profile, on the basis that (i) Emirates has shown no intention
of failing to meet its obligations (ii) Emirates has the financial
backing to continue paying these rentals, the directors believe
that it is appropriate to prepare these financial statements under
the going concern basis of preparation.
The directors have considered Emirates' ability to continue
paying the lease rentals over the next 12 months and are satisfied
that the Group can meet its liabilities as they fall due over this
period. In forming this conclusion, the directors considered the
following evidence.
- Emirates continues to be a going concern as at the date of the
Lessee's latest signed annual financial report for the financial
year ended on March 31, 2021.
- Challenged by an unprecedented drop in passenger air travel
during 2020, the Lessee reacted quickly and temporarily adjusted
its business model with a particular focus on air cargo services.
The high Pandemic-driven demand in this space helped the Lessee to
offset some of its losses in the passenger segment.
- Although Emirates concluded its last financial year with the
first net loss in more than 30 years and refunded already paid
tickets in the amount of USD 2.3 billion, it still has a
substantial cash position, which also benefited from the support of
its ultimate shareholder.
- Emirates confirmed to have access to the capital markets and
was able already able to secure committed offers for the financing
of two upcoming aircraft deliveries.
- The ultimate shareholder of Emirates Airline has injected
another AED 2.5 billion (USD 681 million) into Emirates Airline,
during the Period. Together with the USD 3.1 billion already
contributed during the previous financial year, this adds up to
approximately USD 3.8 billion in total.
- Emirates' listed debt and CDS are trading at non-distressed
levels, indicating the trust capital markets have in Emirates.
- As of the date of the half-yearly financial report, the Board
is not aware of a formal request to the Group for a lease payment
deferral or any other efforts that would result in the
restructuring of the existing transaction.
- Emirates has paid all the lease rentals to the Group in a timely manner.
- If end of lease negotiations with Emirates have not been
concluded by the end of the terms of each current Lease, the lease
rentals due under the existing agreements must continue to be
paid.
Respons i b i l i ty Stateme nt
T h e d irect ors j oin t ly and se v eral ly co n f irm t h at
to t he best of t he ir k no w ledge:
a) the Consolidated Financial Statements, prepared in accordance
with IFRS give a fair, balanced and understandable view of the
assets, liabilities, financial position and profits of the Company
and performance of the Company; and
b) this Interim Management Report includes or incorporates by reference:
i. an indication of important events that have occurred during
the Period and their impact on the Consolidated Financial
Statements;
ii. a description of the principal risks and uncertainties for
the remaining six months of the financial year; and
iii. confirmation that there were no related party transactions
in the Period that have materially affected the financial position
or the performance of the Company during that Period.
Si g ne d on beha lf of t he Board of Dire c t ors of t he
Company.
Charles Wilkinson Geoffrey Hall
Chair Director
16 December 2021
CONSOLIDA T ED S T A T E M ENT OF COM PREHENSIVE INCOME
For the period from 1 April 2021 to 30 September 2021
1 Apr 2021 to 1 Apr 2020 to
Notes 30 Sep 2021 30 Sep 2020
GBP GBP
INCOME
A rent income 4 25,718,503 28,629,339
B rent income 4 10,264,236 10,264,236
Bank interest received 1,781 7,144
-------------- --------------
35,984,520 38,900,719
EXPENSES
Operating expenses 5 (899,183) (831,248)
Depreciation of Aircraft 10 (16,992,018) (18,685,018)
-------------- --------------
(17,891,201) (19,516,266)
Net profit for the period before finance costs and foreign exchange gains 18,093,319 19,384,453
Finance costs 11 (2,722,574) (4,095,314)
-------------- --------------
Net profit for the period after finance costs before foreign exchange
gains 15,370,745 15,289,139
Unrealised foreign exchange (loss)/gain 7 (4,137,113) 10,117,880
-------------- --------------
Profit for the Period 11,233,632 25,407,019
Other Comprehensive Income - -
-------------- --------------
Total Comprehensive Income for the Period 11,233,632 25,407,019
-------------- --------------
Pence Pence
Earnings per Share for the Period
- Basic and Diluted 9 5.11 11.55
In arr i v ing at the results for the f inancial period, all
amounts above relate to continuing operation s.
T he notes on pages 25 to 47 form an integral part of these Con
sol idated F inancial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
A s at 30 September 2021
Notes 30 Sep 2021 31 Mar 2021
GBP GBP
NON-CURRENT ASSETS
Aircraft 10 275,642,874 292,634,892
-------------- --------------
CURRENT ASSETS
Receivables 13 220,425 124,564
Cash and cash equivalents 18 13,813,432 13,749,583
-------------- --------------
14,033,857 13,874,147
TOTAL ASSETS 289,676,731 306,509,039
============== ==============
CURRENT LIABILITIES
Borrowings 15 40,173,924 39,933,913
Deferred income 3,184,479 3,184,479
Rebates 16 347,598 339,805
Payables - due within one year 14 137,487 99,211
-------------- --------------
43,843,488 43,557,408
NON-CURRENT LIABILITIES
Borrowings 15 43,908,783 61,758,176
Deferred income 123,656,545 124,922,062
Rebates 16 347,597 509,707
--------------
167,912,925 187,189,945
TOTAL LIABILITIES 211,756,413 230,747,353
============== ==============
TOTAL NET ASSETS 77,920,318 75,761,686
-------------- --------------
EQUITY
Share capital 17 208,953,833 208,953,833
Retained loss (131,033,515) (133,192,147)
-------------- --------------
77,920,318 75,761,686
-------------- --------------
Pence Pence
Net Asset Value per Share based
on 220,000,000 (31 Mar 2021:
220,000,000) shares in issue 35.42 34.44
The consolidated financial statements were approved by the Board
of Directors and authorised for issue on 16 December 2021 and are
signed on its behalf by:
Charles W il k inson Geoffrey Hall
Chair Director
T he notes on pages 25 to 47 form an integral part of these Con
sol idated F inancial Statements.
CONSOLIDA T ED S T A T E M ENT OF
CA SH FLOWS
For the period from 1 April 2021
to Notes 1 Apr 2021 1 Apr 2020 to
30 September 2021 to
30 Sep 2021 30 Sep 2020
GBP GBP
OPERA TING ACTIVITIES
Profit for the Period 11,233,632 25,407,019
Mo vement in deferred income (4,103,829) (3,286,568)
Interest received (1,781) (7,144)
Deprec iation of Aircraft 10 16,992,016 18,685,018
Bond and EETC interest payable 11 2,528,373 3,901,114
Increase/(decrease) in payables 38,277 (9,825)
De crea se in receivables (95,861) (147,009)
Foreign exchange movement 7 4,137,113 (10,117,880)
A m orti sation of debt arrange ment
costs 11 194,200 194,200
-------------------------- -------------------
NET CA SH FROM OPERA TING ACTIVITIES 30,922,140 34,618,925
-------------------------- -------------------
INVES TING ACTIVITIES
Interest received 1,781 7,144
-------------------------- -------------------
NET CA SH FROM INVES TING ACTIVITIES 1,781 7,144
-------------------------- -------------------
FINANCING ACTIVITIES
Di v idends paid 8 (9,075,000) (9,075,000)
Repa y ments of capital on borrow
ings 21 (19,367,615) (21,508,144)
P ay ments of interest on borrow
ings 21 (2,439,876) (4,052,392)
-------------------------- -------------------
NET CA SH USED IN FINANCING ACTIVITIES (30,882,491) (34,635,536)
-------------------------- -------------------
CA SH AND CA SH EQUIV ALENTS AT BEGINNING
OF PERIOD 13,749,583 13,719,497
Increase/(decrease) in cash and cash
equi valents 41,430 (9,467)
E ff ects of foreign exchange rates 7 22,419 (65,273)
-------------------------- -------------------
CA SH AND CA SH EQUIV ALENTS AT
OF PERIOD 18 13,813,432 13,644,757
-------------------------- -------------------
T he notes on pages 25 to 47 form an integral part of these Con
sol idated F inancial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 1 April 2021 to 30 September 2021
Notes Share Retained Total
Capital Loss
GBP GBP GBP
Balance as at 1 April
2021 208,953,833 (133,192,147) 75,761,686
Total Comprehensive Income
for the Period - 11,233,632 11,233,632
Dividends paid 8 - (9,075,000) (9,075,000)
----------------------- -------------- -------------
Balance as at 30 September
2021 208,953,833 (131,033,515) 77,920,318
----------------------- -------------- -------------
Share Retained Total
Capital Loss
GBP GBP GBP
Balance as at 1 April
2020 208,953,833 (113,657,684) 95,296,149
Total Comprehensive Income
for the Period - 25,407,019 25,407,019
Dividends paid 8 - (9,075,000) (9,075,000)
----------------------- -------------- -------------
Balance as at 30 September
2020 208,953,833 (97,325,665) 111,628,168
----------------------- -------------- -------------
T he notes on pages 25 to 47 f orm an integral part of these
Consolidated Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period from 1 April 2021 to 30 September 2021
1 GENERAL INFORMATION
The Consolidated Financial Statements incorporate the results of
Company , Subsidiary (together known as the Group).
The Company was incorporated in Guernsey on 29 March 2012 with
registered number 54908. The address of the registered office is
given on page 48. Its Share Capital consists of Shares and
Administrative Shares. The Company's Shares have been admitted to
trading on the SFS of the LSE Main Market.
The Company's investment objective is to obtain income returns
and a capital return for its Shareholders by acquiring, leasing and
then selling Aircraft. The principal activities of the Company are
set out on pages 7 to 9 and 18 to 19.
2 ACCOUNTING POLICIES
T he signi f i cant a ccounting poli c ies adopted by the Group
are as fol low s:
(a) Basis of Preparation
The Consolidated Financial Statements have been prepared in
conformity with IFRS, as adopted by the EU, which comprise
standards and interpretations approved by the IASB and IFRIC as
adopted by the EU and applicable Guernsey law. The Consolidated
Financial Statements have been prepared on a historical cost
basis.
This report is to be read in conjunction with the Annual
Financial Report for the year ended 31 March 2021 which is prepared
in accordance with the IFRS as adopted by the EU and any public
announcements made by the Group during the interim reporting period
.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period,
except for the adoption of new and amended standards as set out
below:
(b) Adoption of new and revised Standards
New and amended IFRS Standards that are effective for the
current period
The following Standard and Interpretation issued by the IASB and
IFRIC has been adopted in the current period. The adoption has not
had any impact on the amounts reported in these financial
statements and is not expected to have any impact on future
financial periods:
-- IFRS 16 - COVID-19 related rent concessions. As a result of
the coronavirus (COVID-19) Pandemic, rent concessions have been
granted to lessees. Such concessions might take a variety of forms,
including payment holidays and deferral of lease payments. Lessees
can elect to account for such rent concessions in the same way as
they would if they were not lease modifications. In many cases,
this will result in accounting for the concession as variable lease
payments in the period(s) in which the event or condition that
triggers the reduced payment occurs. The standard is not expected
to have a material impact on the financial statements or
performance of the Group as it is applicable to lessees. The
effective date is for annual periods beginning on or after June
2020. The standard has not had a material impact on the financial
statements or performance of the Company.
New and Revised Standards in issue but not yet effective
IAS 1 'Presentation of financial statements' Classification of
Liabilities as Current or Non-current. The IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the requirements for
classifying liabilities as current or non-current. The effective
date is for annual periods beginning on or after 1 January 2023.
The standard is not expected to have a material impact on the
financial statements or performance of the Group and is not
endorsed by the EU.
(c) Basis of Consolidation
The Consolidated Financial Statements incorporate the results of
the Company and its Subsidiary.
The Company owns 100 per cent. of all the shares in the
Subsidiary and has the power to govern the financial and operating
policies of the Subsidiary so as to obtain benefits from its
activities. Intra-group balances and transactions, and any
unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the Consolidated
Financial Statements.
(d) Taxation
T he Company and its Sub s idiary ha ve been assessed for tax at
the Guernsey standard rate of 0 per cent.
(e) S hare Capital
Shares are classified as equity. Incremental costs directly
attributable to the issue of Shares are recognised as a deduction
from equity.
(f) Expenses
Al l expenses are accounted for on an a ccruals ba s i s.
(g) Interest Income
Interest income is accounted for on an a ccruals ba s i s.
(h) Foreign Currency T ranslation
The currency of the primary economic environment in which the
Group operates (the functional currency) is GBP, GBP or Sterling
which is also the presentation currency. Transactions denominated
in foreign currencies are translated into Sterling at the rate of
exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated into the functional
currency at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the
Consolidated Statement of Comprehensive Income.
(i) Cash and Cash Equivalents
Cash at bank and short term deposits which are held to maturity
are carried at cost. Cash and cash equivalents are defined as call
deposits, short term deposits with a term of no more than three
months from the start of the deposit and highly liquid investments
readily convertible to known amounts of cash and subject to
insignificant risk of changes in value.
(j) Segmental Repo rting
The directors are of the opinion that the Group is engaged in a
single segment of business, being acquiring, leasing and then
selling of the Aircraft.
(k) Going Concern
The directors have prepared these half yearly financial
statements for the period ended 30 September 2021 on the going
concern basis.
The directors in consultation with the Asset Manager are
monitoring the continuous effect of the Pandemic generally on the
aviation industry and specifically on the Group's Aircraft values
and financial wellbeing of its lessee both now and in the future.
The Pandemic continues to have a pervasive impact on the global
economy, and it remains possible that the Group's future
performance could be impacted in this prolonged period of
uncertainty. In many jurisdictions restrictions on the ability of
people to travel still adversely affect the airline sector, and by
extension the Aircraft leasing sector. The risk therefore remains
that some airlines may not be able to pay rent as it falls due. The
impact of the Pandemic on the aviation industry has been
significant with more than 60% of the global passenger aircraft
fleet temporarily grounded back in April 2020. This number has
decreased to about 22% at the time of writing, but is still
materially higher than the historical average. These factors,
together with wider economic uncertainty and disruption, have had
an adverse impact on the future value of the Aircraft assets owned
by the Group, and could also negatively impact the sale, re-lease
or other disposition of the relevant Aircraft.
Given the prolonged impact of the Pandemic, increased lessee
counterparty credit risk remains in existence and there could be
requests for Lease rental deferrals . Reduced rents receivable
under the Leases may not be sufficient to meet the debt interest
and regular repayments of debt scheduled during the life of each
Bond and the EETC, and may not provide surplus income to pay for
the Group's expenses and permit the declaration of dividends.
The option to remarket the Aircraft following a potential event
of default by the Lessee has not been taken into account. The
period of time necessary to successfully complete such a process is
beyond the twelve months forecasting horizon of the going concern
considerations. This applies in particular in times of COVID-19, as
various restrictions are still in place to contain the
Pandemic.
The directors consider that the going concern basis of
accounting remains appropriate. Based on current information the
directors have reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future, although the risk to this is clearly higher since the
Pandemic hit the sector.
The Board will continue to actively monitor the financial impact
on Group from the evolving position with its Aircraft lessee and
lenders whilst bearing in mind its fiduciary obligations and the
requirements of Guernsey law which determine the ability of the
Company to make dividends and other distributions.
Note 15 ('Borrowings') describes the borrowings obtained by the
Group to part-finance the acquisition of its Aircraft. The Group
has obligations under the Bonds to make scheduled repayments of
principal and interest, which are serviced by the receipt of lease
payments from Emirates. The equipment notes were issued by DNAFA to
Wilmington Trust and the proceeds from the sale of the equipment
notes financed a portion of the purchase price of the four Airbus
A380-861 Aircraft, with the remaining portion being financed
through contribution from the Company of the C Share issue
proceeds.
The Group's Aircraft with carrying values of GBP275,642,874 are
pledged as security for the Group's borrowings (see note 15).
The directors, with the support of its Asset Manager, believe
that it is reasonable to assume as of date of approval of
half-yearly financial statements that Emirates will continue with
the contracted lease rental payments due to the following:
- Emirates continues to be a going concern as at the date of the
Lessee's latest signed annual financial report for the financial
year ended on March 31, 2021.
- Challenged by an unprecedented drop in passenger air travel
during 2020, the Lessee reacted quickly and temporarily adjusted
its business model with a particular focus on air cargo services.
The high Pandemic-driven demand in this space helped the Lessee to
offset some of its losses in the passenger segment.
- Although Emirates concluded its last financial year with the
first net loss in more than 30 years and refunded already paid
tickets in the amount of USD 2.3 billion, it still has a
substantial cash position, which also benefited from the support of
its ultimate shareholder.
- Emirates confirmed to have access to the capital markets and
was able already able to secure committed offers for the financing
of two upcoming aircraft deliveries.
- The ultimate shareholder of Emirates Airline has injected
another AED 2.5 billion (USD 681 million) into Emirates Airline,
during the Period. Together with the USD 3.1 billion already
contributed during the previous financial year, this adds up to
approximately USD 3.8 billion in total.
- Emirates' listed debt and CDS are trading at non-distressed
levels, indicating the trust capital markets have in Emirates.
- As of the date of the half-yearly financial report, the Board
is not aware of a formal request to the Group for a lease payment
deferral or any other efforts that would result in the
restructuring of the existing transaction.
- Emirates has paid all the lease rentals to the Group in a timely manner.
- If end of lease negotiations with Emirates have not been
concluded by the end of the terms of each current Lease, the lease
rentals due under the existing agreements must continue to be
paid.
Whilst there is some uncertainty as to the airline industry in
general, and specifically Emirates' financial position and credit
risk profile, on the basis that (i) Emirates has shown no intention
of failing to meet its obligations (ii) Emirates has the financial
backing to continue paying these rentals, the directors believe
that it is appropriate to prepare these financial statements under
the going concern basis of preparation.
The directors have considered Emirates' ability to continue
paying the lease rentals over the next 12 months and are satisfied
that the Group can meet its liabilities as they fall due over this
period.
(l) Leasing and Rental Income
The leases relating to the Assets have been classified as
operating leases as the terms of the leases do not transfer
substantially all the risks and rewards of ownership to the lessee.
The Assets are shown as non-current assets in the Consolidated
Statement of Financial Position. Further details of the leases are
given in note 12.
Rental income and advance lease payments from operating leases
are recognised on a straight-line basis over the term of the
relevant lease. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of
the leased Asset and amortised on a straight-line basis over the
lease term.
(m) Property, Plant and Equipment - Aircraft
In line with IAS 16, each Asset is initially recorded at the
fair value of the consideration paid. The cost of the Asset is made
up of the purchase price of the Assets plus any costs directly
attributable to bringing it into working condition for its intended
use. Costs incurred by the Lessee in maintaining, repairing or
enhancing the Aircraft are not recognised as they do not form part
of the costs to the Group. Accumulated depreciation and any
recognised impairment losses are deducted from cost to calculate
the carrying amount of the Asset.
Depreciation is recognised so as to write off the cost of each
Asset less the estimated residual value over the estimated useful
life of the Asset of 12 years, using the straight line method. The
estimated residual value of the four planes ranges from GBP34.4
million to GBP34.8 million (2020: GBP44.4 million to GBP45.1
million). Residual values have been arrived at by taking the
average amount of three independent external valuers and after
taking into account disposition fees where applicable. During the
annual financial report for the year ended 31 March 2021, it was
determined that the use of soft values excluding inflation best
approximates residual value as required by IAS 16.
The depreciation method reflects the pattern of benefit
consumption. The residual value is reviewed annually and is an
estimate of the fair amount the entity would receive today. Useful
life is also reviewed annually and for the purposes of the
financial statements represents the likely period of the Group's
ownership of these Assets. Depreciation starts when the Assets are
available for use.
At each audited Consolidated Statement of Financial Position
date, the Group reviews the carrying amounts of its Aircraft to
determine whether there is any indication that those Assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the Asset is estimated to determine the
extent of the impairment loss (if any). Further details are given
in note 3.
Recoverable amount is the higher of fair value less costs to
sell and the value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the Asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an Asset is estimated to be less
than its carrying amount, the carrying amount of the Asset is
reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying
amount of the Asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the Asset in prior periods.
A reversal of an impairment loss is recognised immediately in
profit or loss.
(n) Financial instruments
A financial instrument is recognised when the Group becomes a
party to the contractual provisions of the instrument. Financial
liabilities are derecognised if the Group's obligations, specified
in the contract, expire or are discharged or cancelled. Financial
assets are derecognised if the Group's contractual rights to the
cash flows from the financial assets expire, are extinguished, or
if the Group transfers the financial assets to a third party and
transfers all the risks and rewards of ownership of the asset, or
if the Group does not retain control of the asset and transfers
substantially all the risk and rewards of ownership of the
asset.
Under IFRS 9, on initial recognition, a financial asset is
classified as measured at:
- Amortised cost;
- FVOCI; or
- FVTPL.
The classification of financial assets under IFRS 9 is generally
based on the business model in which a financial asset is managed
and its contractual cash flow characteristics. The Group only has
financial assets that are classified as amortised cost.
i) Financial assets held at amortised cost
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold
Assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
Assets that are held for collection of contractual cash flows
where those cash flows represent solely payments of principal and
interest are measured at amortised cost.
These Assets are subsequently measured at amortised cost using
the effective interest method. The effective interest method
calculates the amortised cost of financial instruments and
allocates the interest over the period of the instrument.
The Group's financial assets held at amortised cost include
trade and other receivables and cash and cash equivalents.
The Group assesses on a forward looking basis the expected
credit losses associated with its financial assets held at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
ii) Financial liabilities held at amortised cost
Financial liabilities consist of payables and borrowings. The
classification of financial liabilities at initial recognition
depends on the purpose for which the financial liability was issued
and its characteristics. All financial liabilities are initially
measured at fair value, net of transaction costs. All financial
liabilities are recorded on the date on which the Group becomes
party to the contractual requirements of the financial liability.
Financial liabilities are subsequently measured at amortised cost
using the effective interest method, with interest expense
recognised on an effective yield basis.
The effective interest method is a method of calculating the
amortised cost of the financial liability and of allocating
interest expense over the relevant period.
ii) Financial liabilities held at amortised cost (continued)
The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the
financial liability, or, where appropriate, a shorter period, to
the net carrying amount on initial recognition.
The Group derecognises financial liabilities when, and only
when, the Group's obligations are discharged, cancelled or they
expire.
3 S IGNIFICANT JUDGE M ENTS AND ES TIM A T ES
In the application of the Group's accounting policies, which are
described in note 2, the directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The following are the critical judgements and estimates that the
Directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in the consolidated financial
statements.
Estimates
Residual Value and Useful Life of Aircraft
As described in note 2 (m), the Group depreciates the Assets on
a straight line basis over the estimated useful life of the Assets
after taking into consideration the estimated residual value.
IAS 16 requires the residual value to be determined as an
estimate of the amount that the Group would currently obtain from
the disposal of the Asset, after deducting the estimated costs of
disposal, if the Asset were of the age and condition expected at
the end of its useful life. However, there are currently no
aircraft of a similar type of sufficient age for the Directors to
make a direct market comparison in making this estimation. During
the annual financial report for the year ended 31 March 2021, it
was determined that the use of soft values excluding inflation best
approximates residual value as required by IAS 16.
In estimating residual value for the year, the directors refer
to future soft values (excluding inflationary effects) for the
Asset obtained from three independent expert aircraft valuers.
Details of which have been disclosed in note 10.
The Group's future performance can potentially be impacted
should COVID-19 have a pervasive and prolonged impact on the
aviation industry and on the business of its Lessee and also affect
the residual values of the Aircraft it owns. This together with the
wider economic uncertainty, disruption and illiquid market for the
A380, are likely to have an adverse impact on the future value of
the Aircraft assets owned by the Group, as well as on the sale,
re-lease, or other disposition of the relevant aircraft. Therefore,
the estimation of residual value remains subject to material
uncertainty.
If the estimate of uninflated residual value for use in
calculating depreciation had been decreased by 30 per cent. (30
September 2020: 20 per cent.) with effect from the beginning of
this year, the depreciation charge for the Period would have
increased by approximately GBP4.7 million (30 September 2020:
GBP3.2 million).
An increase in residual value by 30 per cent.(30 September 2020:
20 per cent.) would have had an equal but opposite effect. This
reflects the range of estimates of residual value that the
Directors believe would be reasonable at this time. The useful life
of each Asset, for the purpose of depreciation of the Asset under
IAS 16, is estimated based on the expected period for which the
Group will own and lease the Aircraft. The Board of directors
expects that the Aircraft will have a working life in excess of
this period.
Impairment
As described in note 2(m), an impairment loss exists when the
carrying value of an asset or cash generating unit exceeds its
recoverable amount, which is the higher of its current fair value
less costs to sell and its value-in-use. The Directors review the
carrying amount of its Assets at each audited Statement of
Financial Position date and monitor the Assets for any indications
of impairment as required by IAS 16 and IAS 36.
The directors review the carrying amount of its assets at each
audited Statement of Financial Position date and monitor the assets
for any indications of impairment as required by IAS 16 Property,
Plant and Equipment and IAS 36 Impairment of Assets.
The Board together with the Asset Manager have conducted an
impairment review in the 31 March 2021 year as the below items
resulted in pricing changes for the Aircraft:
-- The impact of COVID-19 on the business of airlines and
indirectly aircraft values, as well as on the credit risk profile
of the Company's Lessee could indicate the need for impairment.
Based on the impairment review performed, an impairment loss of
GBP48,655,256 was recognised in the 31 March 2021 year, with the
impairment test resulting in an updated carrying value of the
Aircraft in total to GBP 292,634,890 at that year end, as reflected
in note 10.
For the current period 1 April 2021 to 30 September 2021, the
Board has considered if there are any further impairment triggers
as set out under IAS 36 and concluded that an interim impairment
review at the 30 September 2021 period end was not practicable. The
Company will again be carrying out a full and thorough appraisal of
residual values come the next March financial year end.
Judgements
Operating Lease Commitments - G roup as Lessor
The Group has entered into operating leases on four (31 March
2021: four) Assets. The Group has determined, based on an
evaluation of the terms and conditions of the arrangements, that it
retains all the significant risks and rewards of ownership of these
Assets and accounts for the contracts as operating leases.
Functional Currency
The currency of the primary economic environment in which the
Group operates (the functional currency) is GBP, which is also the
presentation currency.
This judgement is made on the basis that this is representative
of the operations of the Group due to the following:
-- the Company's Share Capital was issued in GBP;
-- its dividends are paid to Shareholders in GBP, and that
certain of the Group's significant operating expenses as well as
portion of the Groups' rental income are incurred/earned in
GBP.
In addition, the set-up of the leasing structures was designed
to offer a GBP return to GBP investors.
4 RENT AL INCOME
1 Apr 2021 1 Apr 2020
to to
30 Sep 2021 30 Sep 2020
GBP GBP
A rent income 21,642,718 25,370,815
Revenue received but not yet earned (9,995,965) (11,343,224)
Revenue earned but not received 12,613,791 13,154,661
A m orti sation of ad van ce rental income 1,596,602 1,596,602
Deduction of rebate monies (138,643) (149,515)
------------------- ------------------
25,718,503 28,629,339
------------------- ------------------
B rent income 10,236,192 10,236,192
Revenue received but not yet earned (14,022) (14,022)
Revenue earned but not yet received 42,066 42,066
------------------- ------------------
10,264,236 10,264,236
------------------- ------------------
T otal rental income 35,982,739 38,893,575
------------------- ------------------
Rental income is derived from the leasing of the Assets. Rent is
split into A rent, which is received in US dollars and B rent,
which is received in Sterling. Rental income received in US dollars
is translated into the functional currency (Sterling) at the date
of the transaction.
An adjustment has been made to spread the actual total income
receivable over the term of the Leases on an annual basis. In
addition, advance rentals received have also been spread over the
full term of the Leases.
5 OPERATING EXPENSES
1 Apr 2021 1 Apr 2020
to to
30 Sep 2021 30 Sep 2020
GBP GBP
Corporate shareholder and advisor fee
(note 23) 243,678 237,736
Asset management fee (note 23) 328,969 321,005
Liaison agent fee (note 23) 36,652 35,661
A dm ini stration fees 48,159 42,995
B ank interest & charges 419 2,567
A cc ountancy fees (note 23) 10,821 10,740
Regi strar fees (note 23) 4,930 8,991
A udit fees 21,900 16,950
Directors' remuneration (note 6) 51,000 51,000
Directors' and off i cers' insurance 125,564* 63,252
Legal and profess ional expenses 20,674 11,291
A nnual fees 1,994 3,892
Marketing expenses - 6,460
Other operating expenses 4,423 18,708
------------------ ------------------
899,183 831,248
------------------ ------------------
* Due to market conditions at renewal, the directors' and
officers' insurance premium was subject to a large increase.
6 DIRECTORS' REMUNERA TION
Under their terms of appointment, each director is paid a fee of
GBP23,000 per annum by the Group, except for the Chair, who
receives GBP29,000 per annum and the Chair of Audit, who receives
GBP27,000 per annum. The rate of remuneration per director has
remained unchanged.
7 UNREALISED FOREIGN EXCHANGE (LOSSES)/GAINS
1 Apr 2021 1 Apr 2020
to to
3 0 Sep 2021 3 0 Sep 2020
G BP G BP
Cash at bank 22,415 (65,273)
Deferred income (2,838,312) 5,443,785
Borrowings (1,310,760) 4,696,763
Rebates (10,456) 42,605
(4,137,113) 10,117,880
------------- -------------
The foreign exchange loss in the Period reflects the 2.24 per
cent. movement in the Sterling/US dollar exchange rate from 1.378
as at 31 March 2021 to 1.347 as at 30 September 2021.
8 DIVIDS IN RESPECT OF EQUITY SHARES
Dividends in respect of Shares 1 Apr 2021 to
30 Sep 2021
GBP Pence per
Share
First interim dividend 4,537,500 2.06
Second interim dividend 4,537,500 2.06
---------- -----------------
9,075,000 4.12
---------- -----------------
Dividends in respect of Shares 1 Apr 2020 to
30 Sep 2020
GBP Pence per
Share
First interim dividend 4,537,500 2.06
Second interim dividend 4,537,500 2.06
---------- -----------------
9,075,000 4.12
---------- -----------------
Refer to Subsequent Events in note 24 in relation to dividends
declared in October 2021.
9 EARNINGS PE R SHARE
EPS is based on the net profit for the Period attributable to
holders of Shares of the Company of GBP 11,233,632 (30 September
2020: profit for the Period of GBP 25,407,019 ) and 220,000,000 (30
September 2020: 220,000,000) Shares being the weighted average
number of Shares in issue during the Period.
There are no dilutive instruments and therefore basic and
diluted EPS are identical.
10 PROPERTY, PLANT AND EQUIPMENT - AIRCRAFT
TOTAL
GBP
COST
As at 1 Apr 2021 618,050,915
------------
As at 30 Sep 2021 618,050,915
------------
ACCUMULATED DEPRECIATION
As at 1 Apr 2021 276,760,767
Depreciation charge for the
period 16,992,018
------------
As at 30 Sep 2021 293,752,785
------------
ACCUMULATED IMPAIRMENT
As at 1 Apr 2021 48,655,256
Impairment loss for the period -
------------
As at 30 Sep 2021 48,655,256
------------
CARRYING AMOUNT
As at 30 Sep 2021 275,642,874
------------
As at 31 Mar 2021 292,634,892
------------
The Group is depreciating its Aircraft so as to ensure that the
carrying value of its Aircraft at the termination of its lease
equals the uninflated residual dollar value determined at 31 March
2021 in accordance with methodology set out in note 3, translated
into Sterling at the exchange rate prevailing at 31 March 2021.
The Group can sell the Assets during the term of the leases
(with the lease attached and in accordance with the terms of the
transfer provisions contained therein).
Under IFRS 16 the direct costs attributed in negotiating and
arranging the lease have been added to the carrying amount of the
Asset and will be recognised as an expense over the lease term. The
costs have been allocated to each Aircraft based on the
proportional cost of the Asset.
Refer to note 3 for details on the impairment review conducted
by the Company as at the 31 March 2021 year end.
11 FINANCE CO S TS
30 Sep 2021 30 Sep 2020
GBP GBP
Amortisation of debt arrangements
costs 194,200 194,200
Interest payable 2,528,374 3,901,114
------------ ------------
2,722,574 4,095,314
------------ ------------
12 OPERATING LEASES
T he amounts of m ini mum future lea se receipts at the
reporting date under non-can cel lable operating lea ses are detai
led below:
30 September 2021 Next 12
months 1 to 5 years After 5 years Total
GBP GBP GBP GBP
Aircraft- A rent receipts 44,847,834 44,809,034 - 89,656,868
Aircraft- B rent receipts 20,472,384 61,426,536 - 81,898,920
----------- ------------- -------------- ------------
65,320,218 106,235,570 - 171,555,788
----------- ------------- -------------- ------------
31 March 2021 Next 12
months 1 to 5 years After 5 years Total
GBP GBP GBP GBP
Aircraft- A rent receipts 44,025,219 65,853,895 - 109,879,114
Aircraft- B rent receipts 20,472,384 71,662,728 - 92,135,112
----------- ------------- -------------- ------------
64,497,603 137,516,623 - 202,014,226
----------- ------------- -------------- ------------
T he operating lea ses are for four Airbus A380-861 Aircraft.
The terms of the lea ses are as fol low s:
MSN132 - term of the Lease is for 12 years ending August 2025.
The initial lease is for 10 years ending August 2023, with an
extension period of two years ending August 2025, in which rental
payments reduce. The present value of the remaining rentals in the
extension period at the end of the initial 10 year lease must be
paid even if the option is not taken.
MSN133 - term of the Lease is for 12 years ending November 2025.
The initial lease is for 10 years ending November 2023, with an
extension period of two years ending November 2025, in which rental
payments reduce. The present value of the remaining rentals in the
extension period at the end of the initial 10 year lease term must
be paid even if the option is not taken.
MSN134 - term of the Lease is for 12 years ending November 2025.
The initial lease is for 10 years ending November 2023, with an
extension period of two years ending November 2025, in which rental
payments reduce. The present value of the remaining rentals in the
extension period at the end of the initial 10 year lease term must
be paid even if the option is not taken.
MSN136 - term of the Lease is for 12 years ending October 2025.
The initial lease is for 10 years ending October 2023, with an
extension period of two years ending October 2025, in which rental
payments reduce. The present value of the remaining rentals in the
extension period at the end of the initial 10 year lease term must
be paid even if the option is not taken.
13 RECEIVABLES
30 Sep 2021 31 Mar 2021
GBP GBP
Prepayments 220,385 124,524
Sundry debtors 40 40
------------ ------------
220,425 124,564
------------ ------------
T he above carr y ing value of receivables is equivalent to fair
value.
14 PAYABLES (amounts falling due within one year)
30 Sep 2021 31 Mar 2021
GBP GBP
Accrued administration fees 58,980 9,838
Accrued audit fee 18,500 33,200
Accrued registrar fees (note 23) 4,248 4,259
Other accrued expenses 55,759 51,914
------------ ------------
137,487 99,211
------------ ------------
T he above carr y ing value of pa yables is equivalent to the
fair value.
15 BORROWINGS
30 Sep 2021 31 Mar 2021
GBP GBP
Equipment Notes 85,656,465 103,460,047
Associated costs (1,573,758) (1,767,958)
------------ ------------
84,082,706 101,692,089
------------ ------------
Current portion 40,173,924 39,933,913
=========== =============
Non-current portion 43,908,783 61,758,176
=========== =============
Notwithstanding the fact that GBP19.4 million capital was repaid
during the Period, as per the Consolidated Statement of Cash Flow,
the closing value of the outstanding equipment notes decreased by
GBP17.9 million due to the 2.24 per cent. movement in the Sterling
/ US dollar exchange rate for the Period from 1.378 as at 31 March
2021 to 1.347 at 30 September 2021.
The amounts below detail the future contractual undiscounted
cash flows in respect of the Bonds and equipment notes, including
both the principal and interest payments, and will not agree
directly to the amounts recognised in the Consolidated Statement of
Financial Position:
30 Sep 2021 31 Mar 2021
GBP GBP
A m ount due for settlement w ithin 12
months 45,186,146 44,355,945
========== ==========
A m ount due for settlement a fter 12 months 44,799,749 65,835,747
========== ==========
In order to finance the acquisition of the Assets, the
Subsidiary used the Certificates. The Certificates have an
aggregate face amount of approximately $630 million, made up of
"Class A" certificates and "Class B" certificates. The Class A
certificates in aggregate have a face amount of $462 million with
an interest rate of 5.250 per cent. and a final expected
distribution date of 30 May 2023. The Class B certificates in
aggregate have a face amount of $168 million with an interest rate
of 6.125 per cent. and were repaid on 30 November 2019. There is a
separate trust for each class of Certificate. The trusts used the
funds from the Certificates to acquire equipment notes. The
equipment notes were issued to Wilmington Trust, National
Association as pass through trustee in exchange of the
consideration paid by the purchasers of the Certificates.
The equipment notes were issued by the Subsidiary and the
proceeds from the sale of the equipment notes financed a portion of
the purchase price of the four airbus A380-861 Aircraft, with the
remaining portion being financed through contribution from the
Group of the Share issue proceeds. The holders of the equipment
notes issued for each Aircraft have the benefit of a security
interest in such Aircraft. The remaining balance is being repaid by
continuing to amortise borrowings that pays both principal and
interest through periodic payments.
I n the directors' opinion, the carr y ing values of the
equipment notes are approx i mate to their fair value.
16 REBATES
Upon entering into the leases it was agreed that the Lessee
would pay to the Group such amount as estimated to be necessary to
fund the payment by the Group of certain costs, fees and expenses
associated with the transactions arising from the leases. Following
payment of the costs, fees and expenses, it was agreed that such
amount paid by the lessee exceeded the amount actually necessary.
It was agreed that the Group would return the excess to the lessee
over the remaining life of the Leases in May and November of each
year. Upon any termination of a lease prior to its end the Group
shall pay the entire remaining unpaid excess relating to such
Aircraft to such account as is directed by the Lessee, but without
any interest accrued thereon.
17 SHARE CAPITAL
T he Share Capital of the Company is represented by an unli m
ited nu mber of shares.
Issued Administrative Shares
Shares
Issued shares as at 30 September
2021 and as at 31 March 2021 2 220,000,000
--------------------------- -------------------
Issued Administrative Shares
Shares Total
GBP GBP GBP
Ordinary Shares
Share Capital as at 30 September
2021 and as at 31 March 2021 - 208,953,833 208,953,833
----------------------------- ------------ -------------------
Members holding Shares are entitled to receive and participate
in any dividends out of income attributable to the Shares; other
distributions of the Group available for such purposes and resolved
to be distributed in respect of any accounting period; or other
income or right to participate therein.
Upon winding up, Shareholders are entitled to the surplus assets
attributable to the Share class remaining after payment of all the
creditors of the Group.
The holders of Administrative Shares are not entitled to
receive, and participate in, any dividends out of income; other
distributions of the Group available for such purposes and resolved
to be distributed in respect of any accounting period; or other
income or right to participate therein. On a winding up, holders
are entitled to a return of capital paid up on them after the
Shares have received a return of their capital paid up but ahead of
the return of all additional capital to the holders of Shares.
The holders of Administrative Shares shall not have the right to
receive notice of and no right to attend, speak and vote at general
meetings of the Group, except for the Liquidation Proposal Meeting
(general meeting convened six months before the end term of the
lease where the Liquidation Resolution will be proposed) or if
there are no Shares in existence.
18 CASH AND CASH EQUIVALENTS
30 Sep 2021 31 Mar 2021
GBP GBP
Cash at bank 13,813,432 13,749,583
13,813,432 13,749,583
------------- -------------
Cash and cash equivalents are highly liquid, readily convertible
and are subject to insignificant risk of changes in value.
19 FINANCIAL INSTRUMENTS
T he Group's main f inancial instruments comprise:
(a) Cash and cash equivalents that arise directly from the
Group's operations; and
(b) The debt secured on non-current assets.
20 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's objective is to obtain income and returns and a
capital return for its Shareholders by acquiring, leasing and then
selling Aircraft.
T he fol low ing table detai ls the categories of f inancial
assets and liabilities held by the Group at the reporting date:
30 Sep 2021 31 Mar 2021
GBP GBP
Financial assets
Cash and cash equivalents 13,813,432 13,749,583
Receivables (excluding prepayments) 40 40
------------ ------------
Financial assets measured at amortised cost 13,813,472 13,749,623
------------ ------------
Financial liabilities
Payables 137,487 99,209
Borrowings 84,082,707 101,692,089
------------ ------------
Financial liabilities measured at amortised cost 84,220,194 101,791,298
------------ ------------
The main risks arising from the Group's financial instruments
are capital management risk, foreign currency risk, credit risk,
liquidity risk and interest rate risk. The Board regularly reviews
and agrees policies for managing each of these risks and these are
summarised below:
(a) Capital Management
The Group manages its capital to ensure that the Group will be
able to continue as a going concern while maximising the return to
Shareholders through the optimisation of the debt and equity
balance.
The capital structure of the Group consists of debt, which
includes the borrowings disclosed in note 15, cash and cash
equivalents disclosed in note 18 and equity attributable to equity
holders, comprising issued capital and retained earnings.
T he Group's Board of Directors rev iews the capital structure
on a bi-annual ba s i s.
E quity includes all capital and reserves of the Group that are
managed as capital.
No changes were made in the objectives, policies or processes
for managing capital during the period from 1 April 2021 to 30
September 2021 (None for the period from 1 April 2020 to 30
September 2020).
(b) Foreign Currency Risk
The Group's accounting policy under IFRS requires the use of a
Sterling historic cost of the Assets and the value of the US dollar
debt as translated at the spot exchange rate on every reporting
date.
In addition, US dollar operating lease receivables are not
immediately recognised in the statement of financial position and
are accrued over the period of the Leases. The directors consider
that this introduces an artificial variance due to the movement
over time of foreign exchange rates. In actuality, the US dollar
operating lease should offset the US dollar payables on amortising
debt. The foreign exchange exposure in relation to the equipment
notes is thus almost entirely hedged.
Lease rentals (as detailed in notes 4 and 12) are received in US
dollar and Sterling. Those lease rentals received in US dollars are
used to pay the equipment note repayments due, also in US dollars
(as detailed in note 15). Both US dollar lease rentals and
equipment note repayments are fixed and are for similar sums and
similar timings. The matching of lease rentals to settle equipment
note repayments therefore minimise risks caused by foreign exchange
fluctuations.
T he carr y ing amounts of the Group's foreign curren cy deno m
inated monetary assets and liabilities at the reporting date are as
fol low s:
30 Sep 2021 31 Mar 2021
GBP GBP
Debt (US dollar) - Liabilities (85,656,465) 103,460,047
Cash and cash equivalents (US dollar) - Asset 1,217,200 1,363,793
------------- ------------
The following table details the Group's sensitivity to a 25 per
cent. (31 March 2021: 25 per cent.) appreciation in Sterling
against US dollar. 25 per cent. (31 March 2021: 25 per cent.)
represents the directors' assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and
adjusts their translation at the period end for a 25 per cent. (31
March 2021: 25 per cent.) change in foreign currency rates. A
positive number below indicates an increase in profit and other
equity where Sterling strengthens 25 per cent. (31 March 2021: 25
per cent.) against US dollar. For a 25 per cent. (31 March 2021: 25
per cent.) weakening of the Sterling against US dollar, there would
be a comparable but opposite impact on the profit and other
equity:
30 Sep 2021 31 Mar 2021
US Dollar impact US Dollar impact
GBP GBP
Profit or loss 16,887,853 (20,964,768)
Assets (243,440) (272,759)
Liabilities 17,131,293 (20,692,009)
----------------- -----------------
O n the eventual sale of the A ssets, the Group will be subject
to foreign currency risk if settled in a currency other than
Sterling. Transactions in similar assets are typically priced in US
dollars.
(c) Credit Risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group.
Refer to the going concern section on pages 28 where an
assessment of Emirates is made.
The credit risk on cash transactions is mitigated by transacting
with counterparties that are regulated entities subject to
prudential supervision, or with high credit ratings assigned by
international credit rating agencies.
T he Group's f inancial assets expo sed to credit risk are as
fol low s:
30 Sep 2021 31 Mar 2021
GBP GBP
Receivables (excluding prepayments) 40 40
Cash and cash equivalents 13,813,432 13,749,583
------------ ------------
13,813,472 13,749,623
------------ ------------
S urplus cash in the Company is held with RBSI. S urplus cash in
the Sub s idiary is held in accounts w ith RBSI and Wilmington
Trust. The banks ha ve credit ratings given by Mood y's of A3 and
A3 respectively.
There is a contractual credit risk arising from the possibility
that the lessee may default on the lease payments. This risk is
mitigated, as under the terms of the lease agreements between the
lessee and the Group, any non payment of the lease rentals
constitutes a "Special Termination Event", under which the lease
terminates and the Group may either choose to sell the Asset or
lease the Assets to another party.
At the inception of each Lease, the Group selected a Lessee with
a strong balance sheet and financial outlook. The financial
strength of Emirates is regularly reviewed by the Board and the
Asset Manager.
(d) Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in realising Assets or otherwise raising funds to meet
financial commitments. The Group's main financial commitments are
its ongoing operating expenses and payments on equipment notes.
Ultimate responsibility for liquidity risk management rests with
the Board, which established an appropriate liquidity management
framework at the incorporation of the Group, through the timings of
lease rentals and debt repayments. The Group manages liquidity risk
by maintaining adequate reserves by monitoring forecast and actual
cash flows, and by matching profiles of financial assets and
liabilities.
The table below details the residual contractual maturities of
financial liabilities. The amounts below are contractual
undiscounted cash flows, including both the principal and interest
payments, and will not agree directly to the amounts recognised in
the Consolidated Statement of Financial Position:
1-3 1-2 2-5 over 5
months 3-12 months years years years
30 Sep 2021 GBP GBP GBP GBP GBP
Financial
liabilities
Payables -
due within
one year 137,487 - - - -
Equipment
notes 22,640,333 22,545,813 44,799,749 - -
----------- ------------------- --------------------- ---------------------- ----------------------
22,777,820 22,545,813 44,799,749 - -
----------- ------------------- --------------------- ---------------------- ----------------------
1-3 3-12 1-2 2-5
months months years years over 5 years
31 Mar 2021 GBP GBP GBP GBP GBP
Financial liabilities
Payables - due within one year 99,209 - - - -
Equipment
notes 22,223,184 22,132,761 43,986,298 21,849,450 -
----------- ----------- ----------- ----------- -------------
22,322,393 22,132,761 43,986,298 21,849,450 -
----------- ----------- ----------- ----------- -------------
(e) Interest Rate Risk
Interest rate risk arises from the possibility that changes in
interest rates will affect future cash flows. It is the risk that
fluctuations in market interest rates will result in a reduction in
deposit interest earned on bank deposits held by the Group.
The Group mitigates interest rate risk by fixing the interest
rate on the equipment notes debt and the lease rentals.
T he fol low ing table details the Group's expo sure to interest
rate ri s k s:
30 Sep 2021 Variable Fixed Non-interest Total
interest interest bearing
GBP GBP GBP GBP
Financial Assets
Receivables (excluding prepayments) - - 40 40
Cash and cash equivalents 13,813,432 - - 13,813,432
----------------- ------------------- ------------------- -----------
Total Financial Assets 13,813,432 - 40 13,813,472
----------------- ------------------- ------------------- -----------
Financial Liabilities
Payables - - 137,487 137,487
Equipment notes - 85,656,465 - 85,656,465
----------------- ------------------- ------------------- -----------
Total Financial Liabilities - 85,656,465 137,487 85,793,952
----------------- ------------------- ------------------- -----------
Total interest sensitivity gap 13,813,432 85,656,465
----------------- -------------------
31 Mar 2021 Variable Fixed Non-interest Total
interest interest bearing
GBP GBP GBP GBP
Financial Assets
Receivables (excluding prepayments - - 40 40
Cash and cash equivalents 13,749,583 - - 13,749,583
----------- ------------ ------------- ------------
Total Financial Assets 13,749,583 - 40 13,749,623
----------- ------------ ------------- ------------
Financial Liabilities
Payables - - 99,209 99,209
Equipment notes - 103,460,047 - 103,460,047
----------- ------------ ------------- ------------
Total Financial Liabilities - 103,460,047 99,209 103,559,256
----------- ------------ ------------- ------------
Total interest sensitivity gap 13,749,583 103,460,047
----------- ------------
If interest rates had been 50 basis points higher throughout the
Period, and all other variables were held constant, the Group's net
assets attributable to shareholders as at 30 September 2021 would
have been GBP69,067(31 March 2021: GBP68,748) greater due to an
increase in the amount of interest receivable on the bank
balances.
If interest rates had been 50 basis points lower throughout the
Period and all other variables were held constant, the Group's net
assets attributable to shareholders as at 30 September 2021 would
have been GBP69,067 (31 March 2021: GBP68,748) lower due to a
decrease in the amount of interest receivable on the bank
balances.
21 CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
The following table discloses the effects of the amendments to
IAS 7 Statement of Cash Flows which requires additional disclosures
that enable users of financial statements to evaluate changes in
liabilities arising from financing activities, including both
changes arising from cash flows and non-cash flows.
The table below excludes non-cash flows arising from the
amortisation of associated costs (see note 15).
30 Sep 2021 30 Sep 2020
GBP GBP
Opening Balance 103,460,047 157,120,337
Cash flows paid - capital (19,367,615) (21,508,144)
Cash flows paid - interest (2,439,876) (4,052,392)
Non-cash flows:
- Interest accrued 2,528,374 3,901,114
- Rebates movement 154,317 232,327
- Effects of foreign exchange
- Rebates 10,457 (42,605)
- Effects of foreign exchange
- Bonds 1,310,761 (4,696,763)
------------------ -------------
Closing Balance 85,656,465 130,953,873
------------------ -------------
22 ULTIMATE CONTROLLING PARTY
I n the op i n i on of the directors, the Group has no u l ti m
ate contro l ling part y.
23 RELATED PARTY TRANSACTIONS AND MATERIAL CONTRACTS
Amedeo is the Group's Asset Manager.
During the Period, the Group incurred GBP365,621 (30 September
2020: GBP356,666) of expenses with Amedeo, of which GBP328,969 (30
September 2020: GBP321,005) related to asset management fees as
shown in note 5, GBP36,652 (30 September 2020: GBP35,661) was
liaison agent fees. As at 30 September 2021, GBP18,426 (31 March
2021: GBP90,935) was prepaid to this related party.
Nimrod is the Group's Corporate and Shareholder Advisor.
During the Period, the Group incurred GBP243,678 (30 September
2020: GBP237,736) of expenses with Nimrod. As at 31 September 2021,
GBPnil (31 March 2021: GBPnil) was owing to this related party.
JTC Registrars Limited is the Group's registrar, transfer agent
and paying agent.
During the Period, the Group incurred GBP4,931 (30 September
2020: GBP8,991) of expenses with JTC Registrars Limited as shown in
note 5. As at 30 September 2021 GBP4,248 (31 March 2021: GBP4,259)
was owing to this related party.
JTC Fund Solutions (Guernsey) Limited is the Group's Company
Secretary and Administrator.
During the year, the Group incurred GBP58,980 (30 September
2020: GBP53,735) of expenses with JTC Fund Solutions (Guernsey)
Limited as shown in note 5. As at 30 September 2021, GBP58,980 (31
March 2021: GBP9,838) was owing to this related party.
24 SUBSEQUENT EVENTS
O n 14 October 2021, a div idend of 2.0625 pence per Ordinary
Share was de c lared and this was paid on 28 October 2021.
A D V I S O R S A ND C O N T A CT I N F O R M A T ION
K E Y I N F O R M A T ION
E x chan ge: Special ist Fund S e gme nt of t he London S t o ck
E xchan g e's M a in M ark et
T i c k e r: DNA3
Li st ing Da te: 2 July 2013
Financial Year End: 31 M arch
Ba se Curre ncy: Pound Sterling
I S I N: GG00B92LHN58
SED O L: B92LHN5
LEI: 213800BMYMCBKT5W8M49
Coun t ry of I ncorpora t ion:
Guernsey
Registration number: 54908
M A N A G E ME NT A ND A DMI
N I S T R A T ION
Reg i s tered Off i ce Sec retary a nd A dmi n i s trator
D o ric Nimrod A ir T hree L JTC Fund Solutions ( G uernse y) Limi
imi t ed t ed
G round Floor G round Floor
Do rey Court Do rey Court
Ad miral Pa rk Ad miral Pa rk
S t Pe t er P ort S t Pe t er P ort
G ue rnse y, G Y1 2 HT G ue rnse y, G Y1 2 HT
A s se t Manager Reg i s trar
A medeo M ana g eme nt Limi JTC Re g i s trars L imi t ed
t ed
T h e O v al Ground Floor, Dorey Court
Shelbou rne Road Admiral Park
Ba ll sbri d ge S t Pe t er P ort
D ub li n 4, Ireland G ue rnse y, G Y 1 2HT
Corporate and Shareholder Advisor A d voca tes to the Co m pa ny (as
to G u ernsey L a w)
Ni mrod Capi t al LLP Ca rey O lsen
1-3 Norton Folgate Ca rey House
London Le s Ba n q ues
E1 6DB S t Pe t er P ort
G ue rnse y, G Y1 4BZ
So li c i tors to the Comp a ny (as
Lease and Debt Arranger to Eng l i sh L a w)
A medeo M ana g eme nt Limi He rbert Smi th Freehills LLP
t ed
The Oval E x chan ge House
Shelbourne Road P rimrose S treet
Ballsbridge Londo n
Dubli n 4, Ireland England, E C 2 A 2 HS
A u d i tor
Grant Thornton Limited
Lefebvre House
Lefebvre Street
S t Pe t er P ort
Guernsey C.I , GY1 3TF
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IR FLFERFVLRLIL
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