Dubai Aerospace Enterprise records a profit surge of 49% at $69.2 million.
Dubai Aerospace Enterprise (DAE) Ltd has reported a 49% surge in profit before exceptional items at $69.2 million in the first quarter of 2023, compared to $46.6 million in the same period last year. The company’s operating profit also increased by $45.6 million to $154.6 million in the quarter, according to a statement issued by the company on Wednesday.
DAE CEO Firoz Tarapore said that the financial results of the first quarter of 2023 reflect a strong operating environment for airlines, an improving collections and credit profile, and profitable divestment activity. Tarapore added that the company has successfully integrated the acquisition of SKY Fund I into its platform following the acquisition in the fourth quarter of 2022.
The CEO also highlighted that the company’s profitability metrics improved substantially during the quarter, and its credit quality and liquidity metrics remained strong. The company was also able to repurchase $205 million of principal amount of its bonds during the quarter due to interest rate volatility. As a result, the company has increased its bond repurchase authorization following additional repurchases in the second quarter.
Cash flows from operating activities for the period decreased by 20.5% to $283.8 million compared to $357.0 million in the corresponding period last year. However, the company noted that this was primarily due to higher maintenance reserve receipts in the prior period driven by the drawdown of letters of credit associated with aircraft previously leased to Russian customers. Excluding the impact of the letters of credit drawdown, net cash generated from operating activities for the first quarter of 2023 increased by $4.1 million or 1.5% compared to the prior period.
DAE’s total assets stood at $12,607 million at the end of March 2023 compared to $12,709.1 million at the end of December 2022. The company had 437 aircraft in its fleet at the end of the quarter, which is a slight decrease compared to 440 at the end of the preceding quarter.
The company’s strong financial performance for the first quarter of 2023 reflects the improving market conditions for airlines and the successful integration of SKY Fund I into DAE’s platform. As a leading aerospace company in the UAE and the wider region, DAE’s commitment to improving profitability metrics, credit quality, and liquidity metrics has positioned it for sustained success in the coming years. With a focus on innovative solutions and strategic investments in the aerospace industry, DAE is well-placed to continue to grow and expand its operations in the UAE and beyond.
DAE’s strong financial performance in the first quarter of 2023 reflects the company’s successful integration of SKY Fund I into its platform, as well as a favorable operating environment for airlines and profitable divestment activity. The company’s focus on improving its collections and credit profile has also contributed to its positive results for the period.
DAE’s strong credit quality and liquidity metrics, combined with interest rate volatility, allowed the company to repurchase $205 million of principal amount of its bonds during the quarter. The company has since increased its bond repurchase authorization following additional repurchases in the second quarter.
Although cash flows from operating activities for the period decreased compared to the year-ago period, this was primarily due to higher maintenance reserve receipts in the prior period driven by the drawdown of letters of credit associated with aircraft previously leased to Russian customers. Excluding the impact of the letters of credit drawdown, net cash generated from operating activities for the first quarter of 2023 increased compared to the corresponding period in the previous year.
Looking ahead, DAE’s focus on improving its collections and credit profile, as well as its commitment to profitable divestment activity and integration of new acquisitions, are likely to continue to drive its success in the highly competitive aviation industry. With a growing number of airlines seeking innovative and efficient solutions for their fleets, DAE’s position as a leading global aviation services provider is likely to position it for sustained growth and profitability in the years to come.
