The company unveiled US$46.7mln of (non-cash) impairments.
(), the commercial passenger aircraft leasing company, said its customer base continues to recover from the unprecedented effect of the coronavirus (COVID-19) pandemic.
Results for the six months to the end of December saw revenue decline by just 9% to US$61,340 from US$67,606 in the same period of 2019 despite the aviation industry being knocked sideways by restrictions to air travel.
Given the impact of the pandemic on the aviation industry, the value of Avation’s aircraft has been written down by US$46.7mln, contributing to a loss before tax of US$60.45mln, versus a profit of US$45.03mln in the final six months of 2019.
The impairments largely relate to aircraft leased to Philippines Airlines, and Braathens, all of which have been subject to formal or informal restructuring processes.
Net indebtedness at the end of 2020 stood at US$1,050mln, little changed from six months earlier. The net debt to assets ratio rose to 77.0% from 73.2% at the end of June.
The company said its continuing focus for the remainder of the 2021 financial year is to preserve liquidity.
At the same time, it has been offering support to its airline customers by agreeing to defer payment of a portion of their rent in the short-term, until things return to something approaching normality for the aviation industry.
That time may not be too far off, with Avation’s executive chairman, Jeff Chatfield, revealing the past six months have seen most of the company’s customers operating at levels that are more than 50% of their pre-COVID-19levels.
“At the current date, 12 of Avation’s 19 customers are being charged normal monthly rentals. The company has been fortunate that some of its largest customers are based in countries where there has been a less severe impact from the pandemic including VietJet, airBaltic, EVA Air and Mandarin Airlines. These airlines combined represent over 60% of Avation’s future unearned contracted revenue,” Chatfield said.
The executive chairman added that assuming that Avation’s customers continue to meet their contractual obligations to pay rent and arrears, the chances of there being further write-downs to asset values are low.
“The underlying business remains profitable,” Chatfield assured shareholders.
The shares were up 1.7% at 122.5p in the first hour of trading.