TIDMDPA
RNS Number : 5620N
DP Aircraft I Limited
18 May 2015
18 May 2015
DP AIRCRAFT I LIMITED (the "Company")
QUARTERLY UPDATE
The Company is issuing this report for the period from 1 January
2015 to the date of publication as an investor update. It should
not be relied on by Shareholders, or any other party, as the basis
for an investment in the Company or for any other purpose.
Overview
DP Aircraft I Limited, a Guernsey based company, was launched in
October 2013. Its US$ 113 million placing was oversubscribed. The
Company has acquired two Boeing 787-8 aircraft, leased to Norwegian
Air Shuttle ASA, with the two aircraft delivered in June 2013 and
August 2013 respectively. DP Aircraft I Limited took over title to
the aircraft, EI-LNA and EI-LNB, on 9 October 2013. Since that date
all lease obligations have been met in full by Norwegian and no
incidents of note concerning operations of the aircraft have
occurred.
Inclusive of the May 2015 dividend, the Company has so far paid
out as scheduled six dividends of 2.25 cents each. The Company pays
out dividends on a quarterly basis and targets a yearly
distribution of 9 per cent on the initial placing price of US$
1.00. The next interim dividend payment is due on 18 May 2015. The
quarterly distributions are targeted for February, May, August and
November in each year.
Company Information
Ticker DPA
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Company Number 56941
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ISIN Number GG00BBP6HP33
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SEDOL Number BBP6HP3
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Traded Specialist Fund Market
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SFM Admission Date 4 October 2013
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Share Price USD1.0525 as at 12 May 2015
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Country of Incorporation Guernsey
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Current Shares in Issue 113,000,000 Ordinary Shares
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Administrator and Company Secretary Dexion Capital (Guernsey) Limited
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Asset Manager DS Aviation GmbH & Co. KG
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Auditor and Reporting Accountant KPMG
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Corporate Broker Canaccord Genuity Limited
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Aircraft Registration (Date of EI-LNA (28 June 2013)
Delivery) EI-LNB (23 August 2013)
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Manufacturer Serial Number MSN 35304
MSN 35305
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Aircraft Type and Model 787-8
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Lessee Norwegian Air Shuttle ASA
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Website http://www.dpaircraft.com
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The Company's investment objective is to obtain income returns
and a capital return for its Shareholders by acquiring, leasing and
then, when the Board considers it is appropriate, selling the
aircraft.
Aviation Market
In 2015, the International Air Transport Association (IATA)
expects global profits to further increase in all regions to a
total of USD 25.0 billion, with air travel growing by 7 per cent.,
after 2014 already proved to be one of the most profitable years
for airlines globally. The results of IATA's air passenger market
analysis in February confirm that global passenger growth remains
robust. Available Seat Kilometres (ASKs) of European carriers
increased by 2.8 per cent., while Revenue Passenger Kilometres
(RPKs) grew by 4.4 per cent. compared to the same period last year.
The strongest growth was seen in the Asia/Pacific region with a 9.1
per cent. increase in RPKs. Global passenger traffic in the first
quarter of 2015 looks to be up some 5-6 per cent. on the same
quarter in 2014. Moreover, IATA expects over USD 820 billion to be
spent on air transport in 2015.
Although oil prices are sharply down on a year ago, having
reached a six year low in January, there was a partial rebound in
prices in February and some stabilizing in March. Nonetheless,
uncertainty remains regarding the future direction of oil prices,
and therefore aircraft such as the Dreamliner Boeing B787, which
benefits from the latest technology providing low operating and
maintenance costs, will continue to stay in strong demand.
The long-term outlook remains positive for both the aviation
market and the levels of demand for new aircraft. Boeing (Current
Market Outlook 2014-2033) and Airbus (Global Market Forecast
2014-2033) remain of the opinion that passenger fleets will double
by 2033. In February 2015, a total of 128 new aircraft were
delivered. Additionally, according to Boeing, 53 per cent. of
aircraft deliveries over the next twenty years will be within the
200-300 seat category. On top of that, Airbus estimates annual
growth rates of airline traffic (RPK) at 4.7 per cent on average
over the next 20 years, while Boeing believes RPKs will increase by
5.0 per cent per annum. Both manufacturers have made their
forecasts based upon the assumption of an average annual increase
of 3.2 per cent in global GDP over the same period.
Furthermore, according to the latest Airline Business Confidence
Index published in April 2015, two thirds of all participating
airline CFOs and heads of cargo expect profitability to increase
over the next 12 months. Furthermore 79.3 per cent. of participants
assume that passenger traffic volumes will also increase over the
next 12 months.
The Assets: Boeing B787s
The Boeing B787 Dreamliner still ranks alongside the Airbus A350
(which entered into commercial service on 15th January 2015) as the
latest technological, mid-size wide-body aircraft available in the
market. As of April 2015, 261 Boeing B787s have been delivered to
26 different airlines. In the first quarter of 2015, an additional
35 Dreamliners have been ordered by three different customers. With
a backlog of over 840 aircraft orders in March 2015, and production
fully sold out until 2019, it is clear that the aircraft remains in
high demand.
Since DP Aircraft I Limited took title of both LNA and LNB in
2013, Norwegian has met all of its lease obligations in full. The
carrier operates the aircraft in a two-class configuration seating
32 premium economy plus 259 economy passengers.
The chart below gives a short overview of the utilisation of the
airframe and engines of each of the aircraft. LNA's engine, Engine
Serial Number (ESN) 10119, is expected to be back from shop
mid-May. The upgrade, which extends the maintenance intervals for
the engines, of both LNA's and LNB's engines will then be completed
at Rolls Royce's Derby facilities.
AIRFRAME STATUS EI-LNA EI-LNB
(31 March 2015)
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TOTAL March 2015 TOTAL March 2015
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Flight hours 6,669:46 497:15 8,030:38 406:04
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Cycles 841 57 1,009 45
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Block hours (average) 10:95 16:04 13:91 13:10
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Flight hours/Cycles
Ratio 7.93 : 1 8.72 : 1 7.96 : 1 9.02 : 1
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ENGINE DATA
(31 March 2015)
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Engine Serial Number 10118 10119 10130 10135
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Engine Manufacturer Rolls-Royce Rolls-Royce Rolls-Royce Rolls-Royce
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Engine Type and Trent 1000 Trent 1000 Trent 1000 Trent 1000
Model
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Total Time [flight
hours] 5,561:55 4,127:10 3,650:35 3,503:32
--------------------------- ------------ ------------ ------------ ------------
Total Cycles 735 594 353 423
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LLP Various HPT Various HPT Various HPT Various HPT
Components Components Components Components
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Cycles to LLP Replacement 2,765 2,906 3,147 3,007
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Location LNA In Shop LNA Serviceable
Spare
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As announced in the previous Shareholder Report, DS Skytech, the
joint-venture company between DS Aviation and Skytech-AIC, took
over the technical asset management of both of the Company's
aircraft on 1 May 2015.
Norwegian Air Shuttle ASA
Norwegian Air Shuttle transported nearly 24 million passengers
in 2014. As at 31 March 2015, the carrier operated 425 scheduled
routes to 130 destinations in 39 countries. This includes 17
non-stop long-haul routes between Europe and the U.S., as well as
Thailand. In autumn 2015, Norwegian will add three new long-haul
destinations from the UK and Scandinavia, operating flights to
Puerto Rico, St. Croix (in the US Virgin Islands) and Las
Vegas.
In the financial year 2014, operating revenue increased to NOK
19,540 million (USD 2,635 million), while EBIT and net profit
dropped to NOK -1,411 million (USD -187 million) and NOK -1,070
million (USD -142 million) respectively. Ancillary revenues, which
are a crucial source of income under Norwegian's business model,
increased by 34 per cent. per passenger. In the same period ASK
increased by 35.4 per cent. and RPKs by 39.9 per cent. The load
factor therefore increased by 2.6 percentage points to 80.9 per
cent. Unit costs including fuel remained stable, while unit costs
excluding fuel decreased by 1 per cent. Cash and cash equivalents
at 31 December 2014 amounted to NOK 2,011 million (USD 267
million).
The first quarter results for 2015 show that Norwegian's
operating revenues increased by 14 per cent. and EBITDAR improved
by NOK 283.6 million (USD 35.4 million) to NOK 68.4 million (USD
8.5 million) compared to the same quarter of the previous year. The
carrier showed an operating loss of NOK 722 million (USD 90
million), which is a reduction of NOK 54.4 million (USD 6.8
million); and net loss was reduced by NOK 56.4 million (USD 7.0
million) compared to the first quarter of the previous year. ASKs
grew by 7 per cent., and RPKs increased by 15 per cent and
therefore the load factor improved by 6 percentage points to 83 per
cent. The number of transported passengers went up by 2 per cent.
and ancillary revenues per passenger increased by 25 per cent,
mainly due to ancillary revenues from long-haul operations.
Nevertheless, Norwegian's results are challenged by the weak
Norwegian currency and the Q1 2015 results have also been affected
by the 11-day pilot strike in Scandinavia in March. Norwegian
estimates the total costs of the strike, including lost revenues,
to be NOK 350 million (USD 43 million). Nevertheless, according to
Norwegian's CEO Bjørn Kjos, passenger growth on the carrier's
long-haul routes outside Scandinavia is strong and there is a
positive outlook on future booking figures.
Norwegian is still hampered by the delayed US approval process
for a foreign air carrier permit. The airline's application is
supported by the European Commission, which is seeking to
accelerate matters. In any event, although the permit would
facilitate transatlantic operations, Norwegian's current flight
schedule will not be constrained by this approval procedure, and
the carrier continues to expand its long-haul network as previously
mentioned. However, due to administrative reasons and existing
Norwegian civil aviation regulations, the carrier plans to transfer
several B787s from Irish to Norwegian registration to be in the
position to maintain the present smooth running of long-haul
services and to continue with its prospective network extension as
scheduled.
In April 2015, Norwegian took delivery of its eighth B787-8. The
carrier will receive another four Dreamliners in 2016, three in
2017 and a further two B787s in 2018 so that it will operate a
fleet of 17 Boeing Dreamliner 787s by the end of 2018. Last but not
least, Norwegian is targeting growth of 5 per cent. in ASKs by
year's end, and the carrier reports that bookings for the current
year are ahead of last year. Norwegian is expecting further good
progress in its long-haul operations this year, and is on track to
achieve its cost level goal for 2015.
Material Events since 31 December 2014
January 2015
Result of AGM (2 January 2015)
The Board of the Company was pleased to announce that all of the
resolutions put to shareholders at the AGM held on 2 January 2015
were passed.
Interim Dividend (20 January 2015)
The Company declared an interim dividend, in respect of the
quarter ended 31 December 2014, of 2.25 cents per Share, to holders
of Shares on the register at 30 January 2015. The ex-dividend date
was 29 January 2015, and payment was made on 13 February 2015.
March 2015
Annual Financial Report (23 March 2015)
The Company issued its Annual Financial Report for the period
from 5 July 2013 to 31 December 2014.
April 2015
Interim Dividend (20 April 2015)
The Company declared an interim dividend, in respect of the
quarter ended 31 March 2015, of 2.25 cents per Share, to holders of
Shares on the register at 1 May 2015. The ex-dividend date was 30
April 2015, and payment is due today,18 May 2015.
Proposed Placing and publication of Circular (30 April 2015)
The Board of the Company was pleased to announce that the
Company had published a shareholder circular setting out the key
terms of a proposed US$106.8m placing of Ordinary Shares to finance
the acquisition of additional aircraft and convening an
extraordinary general meeting at which approval was sought from
Shareholders for, inter alia, that acquisition.
May 2015
Results of AGM (12 May 2015)
The Board of the Company announced that all of the resolutions
put to shareholders at the AGM held on 12 May 2015 were passed.
Results of EGM (18 May 2015)
The Board of the Company was pleased to announce that all of the
resolutions put to shareholders at the EGM held on 18 May 2015 were
passed.
Accordingly, the Company has the requisite shareholder authority
to proceed to purchase two further Boeing 787-8 aircraft which are
currently leased to Thai Airways. A Prospectus relating to the
proposed equity issue necessary to part finance the acquisition
will be published shortly.
Investor Information
The latest available portfolio information can be accessed by
eligible Shareholders via www.dpaircraft.com
Enquiries:
Kellie Blondel / Carol Kilby
Dexion Capital (Guernsey) Limited
As Company Secretary to DP Aircraft I Limited
Tel: + 44 (0) 1481 743940
This information is provided by RNS
The company news service from the London Stock Exchange
END
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