REG - Avation PLC - AGM Statement

AvationAnnouncement

19/12/2024 07:15

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RNS Number : 7359Q  Avation PLC  19 December 2024

Via RNS and SGXNET

AVATION PLC

("Avation" or "the Company")

 

CHAIRMAN'S AGM STATEMENT

 

Avation PLC (LSE: AVAP), the commercial passenger aircraft leasing company,
will hold its Annual General Meeting today in Singapore which will include the
following Chairman's Statement. The purpose of this statement is to provide
investors with an update on current operations.

 

Market

IATA's most recent air passenger market analysis reported continued strength
in air travel with revenue passenger kilometres increasing 7.1% in the year to
October 2024, surpassing historical highs.

 

Market values and lease rates for commercial aircraft continue to be supported
by constrained deliveries of new aircraft due to continuing supply chain
issues.  Avation believes that values of popular new narrowbody aircraft
types have increased by around 5% over the last year.

 

Fleet Update

In August 2024 Avation sold two six-year-old ATR 72-600 aircraft to their
lessee, releasing around US$ 10 million in net cash after repayment of
associated bank loans.

 

In October 2024 Avation agreed a lease extension for a fifteen-year-old Airbus
A320 at a lease rate that exceeds the previous rental rate for the aircraft.

 

In November 2024 the Company sold a new ATR 72-600 on delivery from the
manufacturer, generating net cash proceeds for around US$ 5 million. The net
proceeds from sale have been deployed to fund pre-delivery payments on
Avation's orderbook for additional ATR aircraft.

 

As of 19 December 2024, Avation owns a fleet of 32 commercial aircraft leased
to 15 airlines in 13 countries.  The average age of the fleet is 7.8 years,
and the average remaining lease term is 3.8 years.

 

The Company has three leased aircraft being returned in 2025. All three
aircraft have been placed with three new airline lessees for subsequent
operation. There are no further lease aircraft being returned until 2026.

 

The Company has two new ATR72-600 aircraft being delivered in 2025. For the
first aircraft, the Company signed a twelve-year lease agreement with a
Japanese airline. This aircraft is currently scheduled for delivery from the
manufacturer in October 2025. The second aircraft has been placed with an
airline in Korea. Both of the two new aircraft have been placed with two new
airline customers. The next available new aircraft scheduled for delivery is
in 2026.

 

With all returning aircraft and new aircraft placed for 2025, the Company will
consider opportunistically acquiring additional aircraft in the secondary
market to further expand the fleet in 2025.

 

Finance Update

Avation has continued to make progress with collections of Covid era related
airline arrears.  Total arrears have been reduced by around US$ 6.4 million
since 30 June 2024. The management team remains highly focussed on collections
of remaining arrears.

 

The Company recently issued 3,692,262 fully paid ordinary shares pursuant to
the exercise of employee and bondholder share warrants, providing total
proceeds of GBP 4.8 million (equivalent to about US$ 6.1 million).

 

Avation currently has US$ 336.8 million secured bank loans outstanding which
bear interest at an average interest rate of 4.86%.

 

Avation also has US$ 331.6 million outstanding 9.00%/8.25% Senior PIK Toggle
Notes which have a maturity of October 2026.

 

Total cash and bank balances increased by US$ 18.6 million since 30 June 2024
to US$ 136.5 million as at the 13th of December 2024.

 

The Company repurchased on the 17(th) of December 2024 a total of 7,800,000
shares representing 10.45% of the outstanding shares for 150p each. These
repurchased shares will be held in treasury. The Company had a view that the
most undervalued security was the ordinary shares and that this repurchase was
the most value accretive.

 

Executive Chairman, Jeff Chatfield, said:

"The commercial aviation market continues to perform well, underpinned by
strong demand for passenger air travel and continued supply chain issues
restricting the supply of new aircraft. Avation is working to improve
shareholder value by repurchasing shares and reinstating dividends. Avation is
well placed to benefit from supportive industry dynamics, both in terms of
growth by the placement of ten new ATR aircraft which we have ordered for
delivery between 2025 and 2028 and by remarketing existing aircraft when their
current leases expire, Avation is therefore confident in its ability to place
the remaining aircraft in its orderbook at lease rates which will generate
value for shareholders."

 

 

-ENDS-

Enquiries:

Avation PLC - Jeff Chatfield, Executive
Chairman
+65 6252 2077

 

Avation welcomes shareholder questions and comments and advises the email
address is: investor@avation.net

Notes to Editors:

Avation PLC is an aircraft leasing company, headquartered in Singapore, owning
and managing a fleet of commercial passenger aircraft which it leases to
airlines around the world. More information on Avation is available at
www.avation.net.

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