SMBC Aviation Capital delivers strong financial performance for half year ended 30 September 2023, with 75% increase in profit before tax

Financial Results – Half Year ended 30 September 2023

• Profit before tax of $236 million, up 75% on H1 FY22, driven by large-scale, high-quality asset growth and favourable demand and supply dynamics enhancing the value of the company’s portfolio.
• Strong cash flow generation over the period, with $958 million in cash from operations², representing an 88% year-on-year increase.
• Continued acceleration of short-haul air traffic globally fuelling demand for narrow-body aircraft at a time when supply is set to become increasingly constrained.
• Strong sales pipeline in secondary trading market, with 12 aircraft sold during the six-month period and agreements in place to trade a further 22 units over the coming months.
• Took delivery of a further $550 million of new technology narrow-body aircraft during the six-month period, with existing orderbook 100% placed through Q3 2025.
• Recently placed orders for an additional 60 x Airbus A320NEO family and 25 x Boeing B737MAX units, taking commitments to new-technology, narrow-body aircraft to 269 units.
• On 2nd October, received cash insurance settlement proceeds of approximately $710 million in respect to 16 aircraft previously leased to Aeroflot. Capital retained within the business and net leverage now 2.8 times.³
• Continue to operate one of the strongest balance sheets in the sector, with ongoing strong support from shareholders SMBC and Sumitomo Corporation, combined with industry leading maturity gap and prudent interest rate hedging policy.
• Raised $1.9 billion of third-party funding since April, including the Company’s first sustainability linked financing – a $150 million, 5-year facility with terms linked to the Company’s future performance against sustainability-linked KPIs.
• Total assets were $24 billion at 30 September 2023. The portfolio comprised of over 911 owned, managed and committed aircraft.

Commenting on the company’s performance, Aisling Kenny, CFO, SMBC Aviation Capital said:

“I am pleased to report another strong financial result, with our profit before tax rising over 75% on a year-on-year basis, driven by underlying fundamentals within the aircraft leasing sector which have rarely been so constructive.

The continued acceleration of short-haul air traffic globally is fuelling demand for our narrow-body aircraft at a time when supply is set to become increasingly constrained.

Despite the rapid adjustment in the interest rate environment, our balance sheet strength and prudent interest rate hedging policy will enable us to continue to deliver long-term and stable returns for our shareholders.”