Financial Performance
Dubai Aerospace Enterprise, one of the largest lessors of aircraft in the world, announced a minor increase in its net profit for the first half of 2024. The fully-owned subsidiary of the Investment Corporation of Dubai announced that its net profit had risen by 5.5 percent year on year to 148.8 million dollars. This rise, therefore, indicates a positive trend despite the broader challenges facing the aerospace sector.
PC: ZAWYA
Revenue for the first half of 2024 was $679.2 million, up slightly from $670.1 million in the comparable period the year before. This increases the revenue in accordance with the financial stability and continued operational success of the company.
Delivery Challenges and Market Outlook
The chief executive officer of DAE, Firoz Tarapore, pointed to Boeing’s continuing delivery issues. “DAE’s order book positions are placed until the second quarter of 2026, although continued delivery uncertainty from Boeing is delaying near-term deliveries,” said Tarapore. This uncertainty over the deliveries from Boeing has remained a challenge and impinged on the ability of DAE to fulfil its delivery commitments for the near term.
Despite this, Tarapore remains an optimist regarding the trading market. He said the market had remained very active in both buying and selling aircraft. “We are actively evaluating acquisitions and divestments of aircraft portfolios. We expect the second half of 2024 to be an active period,” he said, pointing out how DAE is dynamic in moving with the changing times.
Financial Ratios and Debt Management
DAE, in its financial management, considers and emphasises the maintenance of the debt ratio. The amount in an unsecured to total debt ratio as of June 30, 2024, was 77.6 percent against 73.3 percent at the end of 2023. The group has planned to maintain this ratio at approximately 70%. That simply explains that DAE is still on the frontline of active management and optimization of the debt structure while maintaining a diversified funding base across a range of funding sources, including the sukuk markets.
Fleet and Future Prospects
The total fleet stands at 489 aircraft as of mid-2024, down from 493 aircraft at the close of 2023. This represents part of the broader changes within the industry and strategic decisions relating to its aircraft portfolio that DAE has undertaken.
Going forward, DAE is expected to remain very active in the market, with the second half of 2024 likely to show more activity. An indication of what lies in store for DAE is its high volume of orders coupled with strategic acquisitions and divestments, which the company is likely to come out of stronger in future growth and tide over current weak market conditions.
In summary, Dubai Aerospace Enterprise has delivered stable financial performance in the first half of 2024, mitigated delivery delays, and handled debt levels with quite a strong outlook for the second half of the year to retain its lead in the global aircraft leasing industry.
