Amedeo Afp Share Price (AA4)

From 1 January 2023, the Company now receives fixed rent from Thai until the original lease expiry dates, rather than on a power by the hour basis. The airline’s rehabilitation remains ongoing, however lease payments are sufficient to meet debt service ,and a contribution towards expenses, without recourse to the Company’s other funds.

Guitarsolo. Broadly speaking so do I-hence hanging on. I don't understand how Thai Airways filed for bankruptcy protection but is now profitable and not making payments for its leased aircraft. What am I missing here?

SK, personally I think that most (not all) of the uncertainty around income and dividends it towards the upside. Planes coming into service, possible lease extensions (if you think that's possible), even Thai paying something for their aircraft!

My point is that even from here, the Emirates income distribution covers much of the share price. Which leaves the connundrum of what is the value after the leases v the time cost of money.

I hold a reasonable number but could add if the share price drops quicker than the finite income is paid out, and I remain positive about the post-lease value.

Guitarsolo. I feel that there are too many X factors surrounding this company to make any accurate predictions. Hence the massive yield. I suspect (hope) that the dividend will be held for another 2 years then uncertainties abound. It sounds like a worst case scenario would be a scrapping of the whole fleet(unlikely) which might yield $120mill or selling some or all the aircraft for possibly 3 times as much. Maybe new leases will be drawn up. I think it's a matter of faith and trust. I'm hanging on for now.

TB, my take on this (and there are much more knowledgeable folk on here) is that AA4 has a finite amount of income due from its Emirates leases and therefore, all other things being equal, the share price should reduce by 2p per quarter as that income is paid out. Hence the drop from 40p to 38p after the recent divi, which is about where I would put fair value at the moment. FWIW, I see that finite income as something like:

2024(r): 6p

2025: 8p

2026: 6p

2027: 2p (based on warnings that once the income starts dropping it will drop quickly)

2028: 2p

So that implies 24p of dividend income over the next c. 5 years. Of course, there are things that change that:

- Another Emirate A380 due back in service soon

- Depends on overall useage of planes (trouble in the Middle East?)

- How much spare cash does AA4 have that isn't in the dividends?

- Will Thai Airways ever pay for the planes they use?!

But if we do get c.24p of dividends up to the end of the Emirates leases then it means you've got the value of the planes for 14pps! See other discussions for what they may be worth (especially comments by simonm). We should get our first indication early 2025 when news is released what DNA2 sell their A380s for (if they sell them). It will be a year later that AA4 try with their first aircraft that come off-lease.

Anyway, that's my take on why we have a gradually falling share price. It's the starter before the main course!

Guitarsolo