Avolon, a leading global aviation finance company, has published its financial results for the full year 2023. The company recorded a net income of US$339 million, representing a strong year-over-year growth considering the global economic conditions. Avolon also reported a record operating cash flow of $1.75 billion.
Leading metrics and financial indicators suggest that Avolon’s strategic approach to portfolio management, prudent risk assessment, and customer-centric approach have contributed to this outstanding financial outcome. The company has maintained a solid liquidity position, allowing it to seize growth opportunities while also reinforcing its balance sheet strength.
Avolon 2023 Financial Tables
| INCOME STATEMENT (US$M) | Operating cash flow | Year Ended December 31 | |||||||
| 2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | ||
| Lease revenue | 674 | 594 | 80 | +13% | 2,473 | 2,337 | 136 | +6% | |
| Operating cashflow | 444 | 304 | 140 | +46% | 1,751 | 1,207 | 544 | +45% | |
| Adjusted EBITDA* | 684 | 585 | 99 | +17% | 2,510 | 2,375 | 135 | +6% | |
| Net income | 110 | 41 | 69 | +168% | 339 | 9 | 330 | ||
| Balance Sheet (US$M) | December 31, 2023 | December 31, 2022 | $ Change | % Change |
| Total available liquidity | 7,228 | 5,567 | 1,661 | +30% |
| Total assets | 30,513 | 30,796 | (283) | (1%) |
| Secured debt / Total assets | 23% | 22% | 1% | N/A |
| Net debt to Equity | 2.2x | 2.3x | (0.1x) | N/A |
Avolon 2023 Financial Report Highlights
- Announced a robust net income of $110 million in Q4, culminating in an annual figure of $339 million. This reflects a substantial $330 million uptick from FY22, marking a 34% growth when adjusting for the influence of the Russian market in FY22.
- Achieved a milestone with a record-setting operating cash flow of $1.75 billion, indicating a notable increase of 45% compared to FY22.
- Experienced a 6% growth in lease revenue, reaching an impressive $2.5 billion.
- Successfully secured $4.9 billion in debt financing, leveraging public and private financial sectors.
- Maintained a strong liquidity position at year’s end, with $7.2 billion in reserve, including $690 million in unrestricted cash and $6.2 billion in untapped debt facilities.
- After the quarter’s end, it raised $1.15 billion through senior unsecured notes set to mature in 2029.
- Maintained a conservative leverage stance with a net debt-to-equity ratio of 2.2 times, a secured debt-to-total assets ratio of 23%, and a robust portfolio of over $16 billion in unencumbered assets.
- Upheld investment-grade ratings from premier agencies – Moody’s, S&P, Fitch, and KBRA, with Fitch notably enhancing Avolon’s BBB- rating to a Positive outlook.
For a detailed EBITDA reconciliation and further financial insights, visit the earnings presentation at www.investors.avolon.aero. (Please note that Adjusted EBITDA is considered a non-GAAP financial measure.)
Avolon 2023 Business Highlights
- Avolon placed orders for 200 new aircraft, breaking down to 100 Airbus A321neo jets, 80 Boeing 737MAX planes, and 20 Airbus A330neo aircraft.
- Successfully underwrote a substantial $4 billion in new transactions via sale and leaseback deals in the aviation market.
- Completed 147 lease agreements, which include agreements for brand-new aircraft leases, subsequent leases, and extended lease terms.
- Delivered 43 new aircraft to operators and transitioned 30 aircraft across 22 diverse customers.
- Executed sales of 31 aircraft, with plans finalizing for the sale of an additional 25 units.
- Expanded the customer base by welcoming 10 new clients. The company now serves a portfolio of 146 airline customers across 65 countries.
- Grew the fleet, now owning, managing, and having committed to 1,035 aircraft. Those include a significant investment in 458 fuel-efficient, technologically advanced aircraft.
- Received a favorable ‘Low Risk’ rating of 16 from Sustainalytics, reflecting a strong stance on sustainability.
- Contributed to aviation sustainability by supporting a study on Sustainable Aviation Fuel production in Ireland. The study was in collaboration with industry leaders like Boeing and ORIX Aviation.
- Published the Avolon Sustainability Report for 2023, detailing the company’s commitment to sustainable practices in aviation.
Andy Cronin, Avolon CEO, commented:
“Robust demand for aircraft, combined with continued undersupply, provided a tailwind to placing our order book and used aircraft at attractive lease rates, which will drive future profitability. Record operating cash flow and a sharp increase in net income are testament to our success in 2023.
“The orders made for 200 new technology aircraft during the year strengthen our delivery pipeline and provide embedded growth to support our customers into the next decade. Against an attractive market backdrop, Avolon has an industry-leading platform and robust balance sheet to drive future earnings growth.”
About Avolon
Avolon connects investors and customers to foster aviation industry growth, supporting the socio-economic benefits of travel. The company takes a long-term investment approach, ensuring risk diversification and effective capital management to uphold its solid financial position. As of December 31, 2023, Avolon serves 146 airlines across 65 countries. It boasts a diverse portfolio of 1,035 owned, managed, and committed aircraft. For more information, visit www.avolon.aero.
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