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Aircraft leasing firm's profits soar after sales boost

By John Mulligan

Published 12/11/2015

Profits at leasing firm Avolon jumped 33% to $58m (£38m) in the third quarter of the year
Profits at leasing firm Avolon jumped 33% to $58m (£38m) in the third quarter of the year

Profits at Irish aircraft leasing firm Avolon jumped 33% to $58m (£38m) in the third quarter of the year as the company benefited from a mix of lease revenue and jet sales.

The firm - which is in the process of being sold to China's Bohai Leasing in a deal that places a $7.6bn (£5bn) enterprise value on the business - said that total revenue in the latest quarter rose 23% to $201.9m (£132.8m).

Its profit figure was ahead of analyst expectations. Leasing revenue for the quarter amounted to $180.6m (£118.8m, which was 5% ahead of forecasts at Davy Stockbrokers. The company took delivery of $350m (£230m) worth of new aircraft in the period. It delivered eight aircraft to seven customers in six countries in the three months to the end of September.

Avolon also sold seven aircraft in the quarter. Chief executive Domhnal Slattery, who co-founded the company, said that Avolon has also inked a sale and leaseback agreement for five Boeing 787-9 Dreamliner aircraft for delivery to China's Hainan Airlines in 2016 and 2017, subject to the closing of the sale to Bohai.

Avolon's committed fleet for delivery in 2016 now stands at 29 aircraft valued at $1.7bn (£1bn). At the end of the third quarter, Avolon owned 144 aircraft.

"We have delivered on our committed pipeline and we are very pleased to reaffirm our 2015 full year guidance for reported returns on the back of our improving funding costs and a strong trading performance," said Mr Slattery.

The group is targeting a return on equity this year of between 12.8% and 13.1%.

Avolon was founded in 2010 and only floated on the New York Stock Exchange last December. The company will continue to be based in Ireland following its sale.

Belfast Telegraph

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