Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
To obtain income returns and a capital return for its Shareholders by acquiring, leasing and then selling aircraft.
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Guitarsolo. I expect (hope) that the sp to remain stable for the next 2 years subject to market conditions. I'm in for a great dividend over that time
What do people think should be the theoretical price action over the next few years?
If the Emirates-leased planes continue to provide the income until 2026-28 when that will cease, should the share price effectively fall by the amount of the dividend (e.g. 2p per quarter)? We would be getting close to any NAV redemption though, so that should lift the price a tad.
Should we expect, absent any news of lease extensions or change in the situation of the Thai-leased aircraft, that the share price drifts downwards and it becomes a gamble on what the aircraft are worth in a second-hand sale?
Was anyone invested in other aircraft leasors in this position? What happened?
Guitarsolo
Be quite happy to get 18% a year - the main reason I bought some AA4
Maybe worth a top up though
Dividend announcement was made at 1.56 pm
Dividend has been increased to 2.0p per share (from 1.75p last quarter ) for the quarter end 31st December , due to favourable cash position and outlook .
This plus favourable investor chronicle write up should underpin the price
Boom
Buy recommendation in Investors Chronicle today
Thanks Silverknight.
I don't have any worries re the planes leased to Emirates which cover the whole (present) dividend. I also expect those leases to be extended from when they expire in 2026-28, unless someone makes a stonking offer for the planes themselves (incl. Emirates).
But the 4x A350s leased to Thai expire in 2035-36. With Thai Airways back in profit for now, at what point do the Thai courts stop protecting the airline and make them pay for leasing the aircraft?! That's a long time to wait if it is a quasi "0% coupon" before AA4 gets to sell the aircraft! Anyone know when/how/how much the rent from them could be from when they start paying up to 2035/36? Those aircraft will also be a fair bit older at the end of their lease, albeit they will have flown fewer cycles.
Guitarsolo
Guitar. Emirates payments cover the dividend so should be secure for the next 2/3 years .Thai are back in profit so I would think a good chance of some recovery of monies there.
Wcs. In 2026 the 12 aircraft are sold for scrap which should still cover the m/c as it stands right now. If you hold till then you get 15-20p of dividends. Likely that Emirates will continue to lease the 380s. I think the risk/reward ratio is pretty favourable.
Morning All,
The recent update described the aircraft leases to Thai as like a 0% coupon bond (description off the top of my head, I haven't checked the exact wording). In other words, Thai is paying nothing to rent the planes due to its financial position, but AA4 will take back ownership at the end of the lease as per normal.
Does anyone with more knowledge of these affairs than me know if Thai is "likely" to ever pay rent for the aircraft before the leases expire, or should we consider that "them's the breaks". I feel for anyone who has been in here since before Thai's problems (much like me and a few REITs which are worth 1/3 what they used to be).
Many thanks,
Guitarsolo
I agree Silver Knight ..but I think a lot will hang on the Emirates decision on what they do , once the leases on our aircraft expire
Barring another pandemic or chronic international recession I see this as a fairly safe income hold for the next couple of years. There- that's probably put the mokkers on it.
Https://www.benzinga.com/amp/content/35797320
Pratt & Whitney, an RTX (NYSE:RTX) business, has signed a 10-year agreement with Emirates to maintain and support the airline's 116 PW980 auxiliary power units (APUs) on its Airbus A380 aircraft. That’s through to 2033!
Sorry for spamming but these are good.
“ The French OEM stopped manufacturing the double-deckers in 2021. Sheikh Ahmed, however, said the airline would continue to expand its fleet with more A380s from lessors for ‘the right price. “The A380 will stay with us until at least 2035. We will continue to buy it for the right price,” he said.”
While a few of the A380s have been withdrawn from the fleet, Emirates president Tim Clark says he is committed to “keep them going as long as possible”.
“We have to keep a careful eye on [the supply chain], so we’re cannibalising some of the early aircraft and storing the parts,” he said, speaking during the Dubai air show.
“We’ll try to keep 116 going for as long as we can. Back-end of the next decade, it’ll drop to 90.”
Https://www.emirates.com/media-centre/download/ac865b36-8ac7-48f1-9936-21ad2143313e/fleetfastfacts13nov2023.docx
116 is full number of fleet
Https://asianaviation.com/emirates-invests-in-a380-fleet-to-keep-it-flying-longer/
I read this as brilliant news! They have signed deals to maintain 116 aircraft which looks like all the ones flying now plus another 26 - pretty much all their fleet.
Tim Clark, the President of Emirates, believes that the Airbus A380 will continue flying for the next 20 years as there are no viable alternatives available.
https://simpleflying.com/tim-clark-emirates-airbus-a380-fly-util-2040s/
Lease expiry - 2 in '26, 2 in '27, 4 in '28, 3 in '35, 1 in '36.
https://www.aa4plus.gg/company-information/
With Emirates leases, there are no maintenance reserves, the airline pays for the ongoing maintenance events, and then has to return the aircraft in a certain physical condition with payments for deviations to be agreed at the time of return
based on published OEM rates quoted prices from providers for work to be undertaken.
https://www.aa4plus.gg/wp-content/uploads/2023/09/29-Aug-23-Webinar-Presentation-FINAL.pdf
"Emirates continues to extol the virtues of the A380. New widebody replacements are either too small, according to
the airline, or entry into service is being delayed by production or development issues. Recent trades show that
some widebody values are picking up as new aircraft are simply not available when needed. Delivery positions,
overhaul capacity and spare parts prices are all challenging. Two out of service A380s were recently purchased by Emirates for $35m each."
Quarterly Factsheet – 30 September 2023 https://www.aa4plus.gg/news/?_categories=factsheet
So when the lease expire, will Emirates be inclined to purchase the A380s, or renew the lease? We shall have to wait and see. In the meantime am very keen on the divi.
The elephant in the room is that when the leases end in 3-4 years time , and if the market for the second hand planes remains illiquid , then the banks will seize the planes to repay their loans leaving no return of capital to shareholders ...or am I missing something
More like the dovish outlook on interest rates leading investors back to dividend paying stocks. Nothing in that material not already well known. Flood of volume into housing and income stocks today
Plus dividend reinvestment
Https://theoakbloke.substack.com/p/amedeo-amedeo?utm_source=profile&utm_medium=reader2
Airbus have stopped producing the A380 so sadly we can’t order any more – we would have liked to and we would have liked to see an even bigger A380 as well. We’ll still be seeing them flying in 2035 and in all likelihood through to the early 2040s.
https://globetrender.com/2023/06/26/emirates-will-still-be-flying-a380-superjumbos-in-the-early-2040s/
Nice divis collected. Strong write up in IC yesterday saying - profit doubled, NAV up and strong chance of securing 15% yield for next decade.