M
NU
Press Release

27

Mar

2015

CALC Announces 2014 Annual Results

Revenue Up 66.7% yoy Net Profit Surged by 75.5% yoy

Diversified Development to Achieve Sustainable Growth

 

● Revenue increased by 66.7% yoy to HK$1,145.0 million

● Recurring profit before income tax increased by 91.0% yoy to HK$421.8 million

● Including non-recurring IPO listing and share option expenses, net profit attributable to owners of the Company surged by 75.5% yoy to HK$302.7 million

● Basic earnings per share increased by 53.5% yoy to HK$0.577

● Final dividends amounted to HK$0.16

 

[27 March 2015, Hong Kong] The largest independent aircraft lessor in China – China Aircraft Leasing Group Holdings Limited (“CALG” or “the Company”, stock code: 01848.HK) is pleased to announce the annual results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2014 (the “Year”).

 

For the Year, revenue grew by 66.7% yoy to HK$1,145.0 million (2013: HK$686.9 million), which was mainly due to the growth in lease income and income from lease receivables realisation. Even though the one‐off IPO listing expenses and share option expenses offset part of the Group’s profit, profit attributable to owners of the Company still achieved HK$302.7 million (2013: HK$172.5 million), representing a 75.5% increase yoy. Excluding listing and share option expenses, recurring net profit after income tax increased by 87.4% yoy to HK$343.8 million, comparing with HK$183.4 million last year; corresponding recurring net operating profit margin was 30.0%, around 3.3 percentage points higher than that of last year. Basic earnings per share increased by 53.5% yoy to HK$0.577 (2013: HK$0.376).

 

The Board recommends the payment of a final dividend of HK$0.16 per share in respect of the year ended 31 December 2014.

 

Business Review

 

Continuous Fleet Expansion

 

During the Year, airline operator’s demand for aircraft leasing continued to rise. The Group delivered 19 aircraft during the Year, expanding its fleet size to 44 aircraft. As at 26 March 2015, the Group’s fleet increased to 47 aircraft. The Group will continue to expand its fleet to fill with the increasing demand of air traffic in China.

 

New order with Airbus to be delivered before 2022

 

Targeting the fleet expansion and increasing demand for aircraft leasing services by airline customers in China, the Group has placed a bulk purchase order for 100 of A320 series aircraft with Airbus. Delivery is mainly scheduled between 2016 and 2022. Based on the committed purchase orders, the Group’s fleet will grow to 168 aircraft by 2022.

 

Aircraft Lease Receivables Realisation (Securitisation) to Accelerate Capital Cycle

 

The Group completed four aircraft lease receivables realisation in 2014, which brought in revenue of HK$111.5 million (2013: HK$ 57.1 million). Lease receivables realisation capitalises the lease receivables as income in advance, transfer leasing risk, lower financial leverage, and enhance the Group’s cash flow as well as accelerate business development. Aircraft lease receivable realisation has become part of the Group’s business model, and the Group’s plans to continue to implement in the future.

 

To Become One-stop Full Value-chain Aircraft Solutions Provider - Building Asia’s Most Scalable Aircraft Disassembly Plant

 

In December 2014, the Group entered into a Memorandum of Understanding with the Municipal Government of Harbin in relation to the establishment of Asia’s most sizeable aircraft disassembly plant. CALC targets at the aircraft disassembly market in Asia and aims to pioneer in filling the shortage in supply. The project will not only extend and realise the aviation industry value-chain in China, it will also support and in promoting the recycling of resources in line with PRC’s national policy. By satisfying the rigid demand for aged aircraft disposal, the Group will be able to establish its position as a one-stop, full value-chain aircraft solutions provider.

 

Commenting on the Group’s business development in 2014, Dr. Mike POON, Chief Executive Officer of CALC said, “The Group continued to thrive in 2014 and has reached its business objectives to gradually accomplish its mission to become the largest full value-chain aircraft solutions provider. Along with the growing aircraft leasing demand in China and Asia, CALC will grow rapidly with our successful experience in developing the aircraft leasing business as well as our accurate market positioning and business development blueprint. With a strong foothold in China and the ambition to expand globally, the Group is confident to become the largest one-stop full value-chain aircraft solutions provider in the Asia-Pacific region.”

 

Prospects

According to the 12th Five-Year Plan for the Civil Aviation Development, China will continue to develop a comprehensive national aviation network, with a focus on easing air capacity constraints, and further increasing the air traffic in China. In addition, China’s market demand for aircraft will continue to grow, it is estimated that leased commercial aircraft in China will continue to increase by more than 200 aircraft each year.

 

In December 2014, the Group signed two important agreements: the purchase agreement for 100 aircraft with Airbus; and the Memorandum of Understanding with the Municipal Government of Harbin for the establishment of China’s most sizeable aircraft disassembly plant. From 2015, the Group will focus on the implementation of these two important objectives. The Group aims to consolidate its leading position in the aircraft operating leasing market of China, while expediting the development of the aircraft disassembly project

 

In order to demonstrate further the Group’s financing capability, the Group has started its work in convertible bonds issuance in Hong Kong and RMB debt issuance in China. On 26 March2015, the Group signed subscription agreements in respect of the issuance of a three-year convertible bonds of HK$892 million. The RMB debt issuance, which will positively confirm the Group’s capabilities and qualifications for fund raising in the PRC debt market, as well as its credit rating in China, is expected to be done within first half of 2015. In addition to debt issuances, the Group will explore more financing channels to facilitate growth.

 

Chairman of the CALC Board of Directors, Mr. Shuang CHEN said, “The Group will continue to capitalise on the favourable conditions in the aircraft leasing market through proactive enhancement and management of its existing aircraft portfolio and provision of innovative aircraft solutions to attract quality and sizeable airline customers. We will continue to enhance our dual platform model and strengthen our image as an innovative aircraft solution provider in Hong Kong, China and overseas, in order to bring sustainable growth to the Group’s business and shareholders’ value.”

 

Financial Highlight

For the year ended 31 December 2014 (HK$ million) 2013 (HK$ million) Change(%)
Revenue 1,145 687 +66.7%
Recurring profit before income tax 422 221 +91.0%
Recurring net profit after income tax 344 183 +87.4%
IPO listing and share option expenses (41) (11) +276.0%
Profit attributable to owners of the Company 303 173 +75.5%
Earnings per share HK$0.577 HK$0.376 +53.5%
Dividends per share HK$0.16 -- --

*taking out the non-recurring IPO listing and share option expenses

Media Contact

China Aircraft Leasing Group Holdings Limited

Corporate Communications Department