Dubai’s DAE reports 38% drop in net income for H1 2020

Aircraft leasing company Dubai Aerospace Enterprise (DAE) Ltd has reported revenues of $672.6m for H1 2020, down 8.5 per cent year-on-year from $735.2m.

However, it reported an over 38 per cent drop in its net income from January-June. It reported an income of $121.7m, down from $197.1m in the corresponding period last year.

“The reported Net Income in H1 2020 was lower attributable primarily to 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,” said Firoz Tarapore, CEO of DAE.

It reported a pre-tax profit margin of 20 per cent, compared to 29 per cent in 2019 and a pre-tax return on equity of 8.9 per cent compared to 12.5 per cent in H1 2019.

Its unsecured debt as a percentage of total debt remained unchanged at 62 per cent year-on-year. Meanwhile, its available liquidity rose over 17 per cent in H1 2020 to $2.8bn from $2.4bn last year.

.@dubaiaerospace reports its financial results for H1 2020, with total revenue $672.6 million, and net income $121.7 millionhttps://t.co/6xH765ItAm pic.twitter.com/moH1pMpf1k

— Dubai Media Office (@DXBMediaOffice) August 5, 2020

Its unencumbered assets were recorded at $6.5bn this year too compared to $6.1bn in H1 2019.

Fleet utilization remained nearly on par as last year. It was recorded at 99.2 per cent, compared to 99.3 per cent in 2019.

Tarapore said that as of July 31, 2020, DAE had granted rent deferral requests from 34 airlines totaling aggregate rent of approximately 16 per cent of its annual reported revenue.

DAE is also evaluating rent deferral requests from another 24 airlines totaling aggregate rent of approximately 13 per cent of its annual revenue.

“We expect to provide additional assistance to our clients and we also expect arrears to climb,” he said.

In H1 2020, DAE repurchased $187m of bonds and has $229m of remaining repurchase authorisation.

In February, DAE said that it had closed a $300m 5-year, dual tranche term loan.

Read: Dubai Aerospace secures $300m, five-year loan

The lenders included Emirates Islamic and Emirates NBD Capital, the investment banking arm of Emirates NBD.

It said at the time that the unsecured term facility contains a conventional and an Islamic tranche, and can be upscaled to $600m.