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Abu Dhabi, UAEWednesday 14 November 2018

Dubai Aerospace Enterprise's first half profit before tax quadruples

Total value of assets managed by the lessor now stands at $15.5bn

Dubai Aerospace Enterprise's merged platform has completed 108 aircraft transactions during the first half. Courtesy of DAE Capital
Dubai Aerospace Enterprise's merged platform has completed 108 aircraft transactions during the first half. Courtesy of DAE Capital

Dubai Aerospace Enterprise (DAE), the Middle East’s biggest aircraft lessor registered a four-fold increase in profit before tax for the first half of the year over the same period last year following its merger with Ireland-based AWAS and stronger credit margins.

Profit before tax was $224 million (Dh822.6m) for the first half, compared with $42.5m for the same period last year. Pre-tax profit margin was 31.5 per cent.

Total revenue was also up nearly three times to $711.4m from $228.7m for the same period last year, which the company attributed to a substantial growth in fleet following its merger with Ansett Worldwide Aviation Services, one of the world's largest commercial jet aircraft leasing companies. The company did not disclose its second-quarter results.

State-owned DAE said its fleet size was now worth $15.5bn with 375 owned, managed and committed aircraft following its merger with the Irish company.

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Strong first-half results were due to the successful integration of the company with the AWAS platform, chief executive Firoz Tarapore said in a statement.

"Our expectation is for continued improvement in our financial metrics and liquidity profile that will eventually lead to higher credit ratings," he added.

Last month, ratings agencies S&P and Moody’s both revised the corporate credit rating of DAE, based on the “successful” integration with the Dublin-based Awas, which DAE acquired last year.

As part of its merger, DAE acquired 15 aircraft, disposed of eight and closed a total of $774.5m in borrowings for the first half. The company also sold 16 aircraft worth $900m during the period, thanks to strong investor demand for its assets. Since the closure of the merger with the lessor, the combined entity has completed 108 aircraft transactions, an average of 2.7 per day, DAE said in a statement.

In May, DAE signed a deal for an unsecured revolving $480m credit facility with local and regional banks as it sought to diversify its sources of funding.

The four-year deal could be extended to up to $800m and has both Islamic and conventional tranches.