Finance

DAE announces Financial Results for the three months ended March 31, 2021

DAE announces Financial Results for the three months ended March 31, 2021

Dubai Aerospace Enterprise (DAE) Ltd today reported its financial results for the three months ended March 31, 2021. The consolidated financial statements can be found here.

  • Strong business momentum with sequential Lease Revenue growth of 7.1% in Q1 2021
  • Owned and managed aircraft asset acquisitions and sales of US$573 million and US$152 million, respectively
  • Operating cash flows of US$218 million in Q1 2021
  • Adjusted Profit Before Tax of US$25.0 million impacted by higher loss allowance

Selected Financial and Operating Highlights:

  • Total Revenue: US$307.5 million (Q1 2020: US$352.0 million)
  • Adjusted Profit Before Tax: US$25.0 million (Q1 2020: US$83.8 million)
  • Unsecured Debt as a percentage of Total Debt: 66.2% (Year-end 2020: 62.6%)
  • Available Liquidity: US$3,277.3 million (Year-end 2020: US$2,693.0 million)
  • Fleet Utilization: 98.6% (Year-end 2020: 98.2%)
  • Collection rate[1] in Q1 2021: 97% (Q4 2020: 100%)

Commenting on the results, Firoz Tarapore, Chief Executive Officer of DAE, stated, “We saw a robust level of business activity in Q1 2021 in both our Aircraft Leasing and Engineering divisions. Revenue at DAE’s Engineering division hit a record high, and DAE’s Aircraft Leasing division recorded sequential growth in Lease Revenue driven by net additions to our owned portfolio. We continued to underwrite new technology aircraft and grew our aircraft portfolio by taking delivery of 13 fuel efficient aircraft in Q1 2021.

We continue to strengthen our balance sheet. Since the onset of the pandemic, we have added US$69.8 million to our loss allowance, which now stands at US$84.3 million. In addition, we augmented our liquidity position by issuing US$1.55 billion of new, unsecured debt in Q1 2021 with an average maturity of 5.25 years.

We remain both encouraged by and vigilant about the trends in our industry. Air traffic demand in large domestic markets is recovering at an encouraging pace; however, cross-border travel is recovering at a slower and more uneven pace despite considerable pent-up demand globally. We remain confident that deployment of vaccines in the next six months will be faster and more broad-based than it has been heretofore, and this will form the foundation for the next leg up in international, regional and domestic air travel growth.”

Forward Looking Statements

Certain information contained in this Press Release may constitute “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may”, “will”, “should”, “could”, “continue”, “expect”, “anticipate”, “predict”, “project”, “plan”, “estimate”, “budget”, “assume”, “potential”, “future”, “intend” or “believe” or the negatives thereof or other comparable terminology. These statements reflect DAE’s current expectations and assumptions and involve known and unknown risks regarding future events, results or outcomes and are not guarantees of future results or financial condition. Actual results, performance, achievements or conditions may differ materially from those in the forward‐looking statements and assumptions as a result of a number of factors, many of which are beyond DAE’s control.

Non-IFRS Financial Information

This Press Release may include certain non-IFRS financial information, such as Adjusted EBITDA, not prepared in accordance with IFRS. Because of the limitations of Adjusted EBITDA, it should not be considered as a substitute for financial information prepared or determined in accordance with IFRS, as applicable. Where applicable, DAE compensates for these limitations by relying primarily on its IFRS results and using Adjusted EBITDA only for supplemental purposes.

Results of Operations

The following discussion of our results of operations is based on the condensed consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position which have been extracted from our financial statements for the three months ended March 31, 2021.

Results of operations (in millions of USD)

Three months ended Mar 31

2021

2020

Consolidated statement of profit or loss and comprehensive income
Total revenue

307.5

352.0

Gain on disposal of aircraft

1.2

7.9

Expenses
Depreciation and amortization

(143.7)

(140.0)

General and administrative expenses

(14.1)

(20.3)

Cost of providing engineering maintenance services

(16.9)

(14.8)

Loss allowance

(15.9)

(6.2)

Aircraft maintenance

(4.3)

(3.0)

Operating profit

113.8

175.6

Finance income

1.9

7.1

Finance expense

(90.7)

(98.9)

Debt redemption costs

(16.1)

Net finance costs

(104.9)

(91.8)

Profit before income tax

8.9

83.8

Income tax expense

(0.6)

(7.1)

Profit for the period

8.3

76.7

Add back debt redemption costs

16.1

Adjusted profit for the period

24.4

76.7

 

As at

Consolidated statement of financial position (Extract)

Mar 31, 2021

Dec 31, 2020

Total cash and cash resources

812.6

566.5

Aircraft held for lease

11,492.7

11,321.0

Total assets

13,160.0

12,742.5

Total loans and borrowings

8,473.0

7,907.2

Total equity

2,928.1

2,891.1

Total liabilities and equity

13,160.0

12,742.5

 

Three months ended Mar 31

Adjusted EBITDA calculation (1)

2021

2020

Profit for the period

8.3

76.7

Add back
 Net finance costs

104.9

91.8

 Income tax expense

0.6

7.1

 Loss allowance

15.9

6.2

 Depreciation and amortization

143.7

140.0

Adjusted EBITDA

273.4

321.8

As at

Financial metrics

Mar 31, 2021

Dec 31, 2020

Pre-tax margin (per cent(2)

2.9

19.2

Pre-tax return on equity (per cent(3)

1.2

8.4

Net debt to equity (times(4)

2.65x

2.57x

Total available liquidity (USD billions) (5)

3.3

2.7

Unsecured debt/total debt (per cent) (6)

66.2

62.6

Liquidity coverage ratio (per cent) (7)

274.7

235.2

 

All financial information above has been rounded for presentation purposes. Any percentages are based on unrounded figures.

  1. We define Adjusted EBITDA as profit, excluding net finance costs, loss allowance for financial assets, income tax expense and depreciation and amortization.
  2. Calculated as profit before income tax divided by total revenue.
  3. Calculated as profit before income tax (annualized in the case of interim periods) divided by average total equity.
  4. Calculated as net debt (being total loans and borrowings, net of debt issuance costs less cash and cash equivalents) divided by total equity.
  5. Calculated as the sum of available revolving credit and cash and cash equivalents.
  6. Calculated as unsecured loans and borrowings divided by total bank loans.
  7. Calculated as total available liquidity divided by recourse debt payments.
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