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CALC: Results in the First Half of 2017 Revenue and Other Income Surge 22.5% to HK$1,258 Million Net Profit Up 3.6% to HK$248.7 Million while Dividend Payout Ratio Reaches 49%
Source: CALC
25/08/2017

CALC (the “Group”, SEHK stock code: 01848), a full value-chain aircraft solutions provider for global airlines, is pleased to announce the Group’s interim results for the six months ended 30 June 2017.

 

Financial Highlights

•  Revenue and other income increased by 22.5% to HK$1,258.0 million on the back of continued expansion of the aircraft leasing business and successful implementation of its globalization strategy

•  Net profit grew 3.6% to HK$248.7 million, while basic earnings per share was HK$0.37

•  Total assets increased by 10.1% to HK$34,028.7 million

•  Gearing ratio dropped by 0.4 percentage points to 83.2%

•  Completed the disposal of finance lease receivables for 10 aircraft as our recurrent business

•  Declared an interim dividend of HK$0.18 per share (six months ended 30 June 2016: HK$0.14 per share), an increase of 28.6% with dividend payout ratio of 49%

 

Business Review

Aircraft Leasing Business Saw Strong Growth with Growing Fleet Size and New Boeing Order

•  Delivered nine aircraft in first half of 2017 to new customers, of which six were delivered to overseas airlines, fleet size grew to 90 aircraft as at 30 June 2017

•  Expanded and diversified its current client base to 20 airlines across eight countries and regions

•  Placed its first purchase order with Boeing for 50 new 737 MAX series aircraft, scheduled for delivery in stages up to 2023

•  138 very popular narrow-body aircraft on order

•   Has one of the youngest fleet with an average age of 3.8 years, and the longest average remaining lease term among its peers of approximately nine years

•  The Group expects to deliver 20 aircraft in the second half of 2017 and to expand its fleet to around 110 aircraft by the end of 2017

 

Enhanced Financing Flexibility and Bolstered Balance Sheet

•  The Group took advantage of the low interest rate environment and issued its third US dollar senior unsecured bond, comprising US$300 million five-year and US$200 million seven-year bonds with coupon rates of 4.7% and 5.5% respectively

•  The Group repurchased convertible bonds in an aggregate principal amount of HK$155.2 million from China Everbright Financial Investments Limited, helping to shore up its balance sheet

•  The Group entered into interest rate swaps for long-term aircraft loans with US dollar floating interest rate for another 11 aircraft to mitigate risk of interest rate fluctuations

 

Continued to Strengthen Unique Position as an Aircraft Full Value Chain Solutions Provider

•  With 48% of its equity interest held by CALC, Aircraft Recycling International Limited (“ARI”) currently has 10 aircraft in its fleet, among which four (one of which is under a joint venture) were leased to Sichuan Airlines while the other six were under negotiation for trade-out

•  The construction of the world’s largest aircraft recycling facility in Harbin is progressing well and is expected to be completed by the fourth quarter of 2017

•  ARI completed the acquisition of 100% equity interest in Universal Asset Management, Inc., one of the world’s leading global diversified aviation solutions providers based in Tennessee, US. The acquisition creates a global aircraft solutions platform and further strengthens CALC’s position as an aircraft full value chain solutions provider

 

Mr. CHEN Shuang, Chairman of CALC, said, “CALC’s strong performance in the first half of 2017 again demonstrated its strong growth momentum. With its successful execution of its globalization strategy and fleet expansion plan, together with the continued expansion and diversification of its clientele, CALC is working towards being a full value-chain aircraft solutions provider for global airlines. We are well positioned to capture significant opportunities globally.”

Mr. Mike POON, Chief Executive Officer of CALC, added, “Leveraging on our competitive advantages built over a decade, and as a key global aviation industry player, we continued to expand our fleet in the first half of this year and achieved a significant step forward by adding the Boeing 737 MAX series aircraft into our fleet for the near-term future. Our track record of effective marketing and efficient placements showcases our capability to provide full life-cycle aircraft solutions as a means to enlarge our international client base globally in the dynamic market, generating added-value for our customers and shareholders.”

“As Hong Kong is forging ahead with its initiatives to develop into an international aircraft leasing hub and aviation finance center, we wish to continue our active role in the aviation industry and work with the Hong Kong government by leveraging on our expertise in global financing, insights as well as our previous experience in promoting Tianjin as one of China’s major leasing hubs. Currently, we are actively planning to extend our leasing platform to Hong Kong as a first mover in support of the government's initiative.”

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