DAE’s first-half profit drops as it owns fewer aircraft and asset sales drop
Dubai Aerospace Enterprise, the Middle East’s biggest aircraft lessor, posted a 38 per cent drop in first-half profit due to it having fewer owned aircraft in its fleet and lower asset sales.
Net income for the six months ending June declined to $121.7 million (Dh447m), from $197.1m a year ago, DAE said yesterday. First-half revenue dropped by 8.5 per cent year on year to $672.6m.
Chief executive Firoz Tarapore said DAE had “23 fewer aircraft in the owned aircraft portfolio, fewer asset sales resulting in lower gains on sale of assets, reduced finance income and higher provisions for trade receivables offset by lower interest expense”.
“Our financial results for the first half of 2020 were characterised by excellent and abundant liquidity, [a] strengthening balance sheet and lower reported profitability,” he said.
As of July 31, the company said it had approved 34 requests from airline customers to defer payments for leased planes, with the total accounting for about 16 per cent of annual reported revenue.
DAE is currently evaluating requests from an additional 24 airlines, and the total is expected to be about 13 per cent of annual revenue.
“We expect to provide additional assistance to our clients and we also expect arrears to climb,” the plane lessor said.
The aviation industry is grappling with its worst crisis after the Covid-19 pandemic devastated air travel demand and grounded planes, leaving airlines cash-strapped. DAE said it held $2.8 billion in cash and available liquidity at the end of June.
During the first half, it repurchased $187m of its bonds and has $229m of remaining repurchase authorisation.
The company, which consists of a leasing division and an engineering division, is fully owned by the Investment Corporation of Dubai.
The company’s leasing division had a fleet of 351 aircraft at the end of June, of which 297 were owned and 71 managed.