Singapore-based aircraft leasing company BOC Aviation reported a net loss after tax of $313 million for the first half of 2022.
A major contributor to these financial losses has been multiple write-downs of aircraft leased to air carriers in Russia, the lessor explained in its latest financial review released on August 18, 2022.
BOC said it wrote down around $804 million for 17 jets stranded in the country.
“As of 30 June 2022, 17 of the Group’s owned aircraft whose leases were terminated in March 2022 in compliance with the sanctions remain in Russia and the Group believes that it is unlikely to be able to recover those aircraft from Russia in the foreseeable future, if ever,” the report said.
BOC’s total assets decreased by 4% to $22.8 billion as of June 2022 compared with $31 billion in December 2021, primarily due to the write-down of the net book value of aircraft remaining in Russia.
“Our lease rental income and core lease rental contribution declined by 5% and by 19% to $877 million and $280 million, respectively, in the first half of 2022 due to lower lease rental income owing to aircraft off lease and the loss of revenue from aircraft that remain in Russia,” the lessor said.
In 2021, BOC reported a net profit of $254 million after tax during the same period.
However, despite the recent losses, BOC maintained strong liquidity with $454 million in cash during the last six months.
Postponed plane deliveries
BOC also addressed the significant postponements of plane deliveries to its customers.
While the lessor added more aircraft to its order book, which currently stands at 181 planes compared to 104 jets at the end of 2021, ongoing disruptions to the global supply chain, as well as staff shortages across the aircraft production segment, had a negative impact on jet manufacturers.
These disruptions forced BOC to postpone deliveries of nine aircraft to the second half of the year instead of H1 2022.
“Our owned fleet increased to 390 aircraft as of 30 June 2022, up from 380 at the end of 2021, with growth slowed by ongoing manufacturer delivery delays. These delays affected nine aircraft scheduled for delivery in 1H 2022 and have resulted in accompanying reductions in our capital expenditure and revenue,” BOC said.