Merger with Irish firm Awas raises first-half profit for Dubai Aerospace

Dubai Aerospace Enterprise, the Middle East’s biggest aircraft lessor, registered a fourfold increase in profit before tax for the first half of the year over the same period last year following its merger with Irish Awas and stronger credit margins.

Profit before tax was $224 million (Dh822.6m) for the first half, compared with $42.5m for the same period last year. Pre-tax profit margin was 31.5 per cent.

Total revenue was also up nearly three times to $711.4m from $228.7m for the same period last year, which the company attributed to a substantial growth in fleet following its merger with Ansett Worldwide Aviation Services, one of the world’s largest commercial jet aircraft leasing companies. The company did not disclose its second-quarter results.

State-owned DAE said its fleet size was now worth $15.5bn with 375 owned, managed and committed aircraft following its merger with the Irish company.

Strong first-half results were due to the successful integration of the company with the Awas platform, chief executive Firoz Tarapore said.

“Our expectation is for continued improvement in our financial metrics and liquidity profile that will eventually lead to higher credit ratings,” he said.

Last month, ratings agencies S&P and Moody’s both revised the corporate credit rating of DAE, based on the “successful” integration with the Dublin-based Awas, which DAE acquired last year.

As part of its merger, DAE acquired 15 aircraft, disposed of eight and closed a total of $774.5m in borrowings for the first half.

The company also sold 16 aircraft worth $900m during the period, thanks to strong investor demand for its assets.

Since the closure of the merger with the lessor, the combined entity has completed 108 aircraft transactions, an average of 2.7 per day, DAE said.

In May, DAE signed a deal for an unsecured revolving $480m credit facility with local and regional banks as it seeks to diversify its funding sources.

The four-year deal could be extended to up to $800m and has both Islamic and conventional tranches.