SMBC Aviation Capital results for the full year ended 31 March 2022

YE March 2022 Highlights – Clear signs of recovery in face of global challenges

• Strong underlying performance driving profit before tax and exceptional items of $336m for the year ended 31 March 2022, compared to $15.2m for the year ended 31 March 2021 and $364.5m for the year ended 31 March 2020, with continued momentum expected through coming financial year. $1.5bn lease revenue and other operating income, compared to $1.2bn for the year ended 31 March 2021
• Agreement to acquire Goshawk in May for $6.5bn enterprise value, with recapitalisation by shareholders to provide equity and debt capital up to the full acquisition price. Transaction expected to close in Q4, with additional diversified third-party funding sources to be used to fund acquisition as required
• Net loss of $1.1bn due to aggregate one-off $1.6bn impairment following termination of leasing of aircraft to Russian airlines. The aircraft are no longer under SMBC Aviation Capital’s control, resulting in the write-off of the full carrying value of the 34 owned aircraft remaining in Russia
• Continued strong funding base with $12.3bn shareholder support, $1.47bn of 3rd party debt raised and $1bn of bonds issued at industry leading pricing
• A- rating with both Fitch and S&P reaffirmed
• Increased A320neo and B737 MAX demand during the year with 41 aircraft placed from order book
• Rapidly recovering sales market with the business signing LOIs / contracts for sale of 25 aircraft (23 sold during the year ended 31 March 2022 for $68.3m profit)

Commenting on the company’s performance, Peter Barrett, CEO, SMBC Aviation Capital said:

“These results demonstrate the strong upward trajectory of our business despite the considerable impact of the Russia-Ukraine war and Covid-19. While we are seeing ongoing challenges, the business is benefiting from a market recovery that continues to gather pace and a positive rebound in airline and investor demand for our portfolio of high quality assets.

We are on track to close the Goshawk acquisition in Q4, which will reinforce our leading market position and give us further momentum and competitive advantage. Our shareholders are providing considerable support and the recapitalisation they are undertaking ensures we maintain our A- ratings with both S&P and Fitch. The expanded SMBC Aviation Capital will be very well suited to the shape of the recovery that is taking place. Our continued balance sheet strength, combined with our ability to access diversified funding sources, enables us to continue developing our business in line with our disciplined strategy.

Following the Russian invasion of Ukraine earlier this year our thoughts and concerns are first and foremost with those in Ukraine and beyond who are impacted by this terrible conflict. 34 owned aircraft remain in Russia despite SMBC Aviation Capital terminating the leasing of these aircraft in line with international sanctions, which Russian airlines continue to fly within Russia and to countries from which repossession has not been possible.

It is unlikely that SMBC Aviation Capital will be able to recover the 34 owned aircraft within a reasonable timeframe, or at all. As a result, we have recognised a $1.6bn write-off in respect of the aircraft, representing a full impairment of the carrying value. We have the benefit of significant insurance coverage and have every expectation that substantial recoveries will be secured.”

-ENDS-

MEDIA CONTACTS:

SMBC Aviation Capital:

Dara O’Sullivan                                                       +353 86 021 0135

FGS Global:

Charles O’Brien / Richard Webster-Smith / Theo Davies-Lewis     

+44 20 7251 3801

ABOUT SMBC AVIATION CAPITAL:

Headquartered in Dublin, Ireland, SMBC Aviation Capital is one of the world’s leading aircraft leasing companies, with an owned, managed and committed fleet of over 730 aircraft. The company focuses on the most technologically advanced, fuel efficient and narrowbody aircraft types, providing customers across the globe with the aircraft they need to successfully grow their businesses. Established in 2001, the company was acquired in 2012 by a consortium comprising of two of Japan’s biggest companies SMFG and Sumitomo Corporation. For additional information, please visit SMBC Aviation Capital’s website at https://www.smbc.aero/

^[1] – The financial and non-financial metrics disclosed for the period relate to SMBC Aviation Capital’s Irish entity and its subsidiaries