Revenues climb 35% at Irish aircraft leasing firm

Revenues at Irish aircraft leasing firm Avolon soared 35% to $606m (€542m) last year as the company’s market leading fleet continued to deliver value for shareholders.

Revenue grew from $449.7m in 2013. Net income fell to $91.1m from $112.8m.

However, adjusted net income taking into account the company’s $1.6bn flotation last December grew 43% to $179m.

Commenting following the release of the company’s full-year results yesterday, Avolon chief executive Dómhnal Slattery attributed the group’s strong performance to falling funding costs and an increase in the number of aircraft under its control.

“Avolon delivered a strong performance against key financial and operating metrics in 2014. Revenue increased 35% year-on-year and our adjusted net income increased 43%.

“The strength of this performance is due to the strong growth in our fleet, our reducing cost of funding balanced origination model and consistent ability to deliver trading gains underpinned by what we believe is the industry’s leading risk-management system,” said Mr Slattery.

The final quarter of 2014 alone delivered strong growth for the lessor with revenues increasing $49m, or 39%, to $173m compared to $124m for the same period in 2013.

Adjusted net income for the quarter increased by $21m, or 74%, to $49m for the quarter, compared to $28m for the same period in 2013.

However, net income for the fourth quarter was a loss of $13m reflecting the one-off costs associated with the December initial public offering and share-based compensation charges.

The group has 235 aircraft in its fleet, including: 99 owned; more than 70 committed; and 10 which it manages. This represents an increase of 53 aircraft on 2013 levels.

With an average age of 2.5 years on its existing fleet of owned aircraft and remaining lease term of 7.1 years Avolon’s fleet remains industry leading, according to the company. Avolon also sold nine aircraft for a gain of $64m in the past year.

“At the end of 2014, the embedded market value in value in our fleet, according to independent industry appraisers, was $568m.

“This significant premium highlights the intrinsic value of the Avolon business and reflects our industry leading aircraft portfolio, our ability to acquire trade assets at attractive prices and our robust underwriting criteria and asset risk management,” Mr Slattery added.

Some 13.6m shares were sold as part of the company’s initial public offering late last year after China’s AVIC Capital announced it was cancelling plans to acquire the Irish-based company after the aircraft leasing firm’s board and shareholders rejected the proposed offer.

Avolon was founded in 2010 by Clare-born entrepreneur Mr Slattery.