SMBC Aviation Capital posts profit of €190m

Irish-based aircraft leasing giant SMBC Aviation Capital earned more than $212 million (€190m) in profits last year, accounts just published show.

The company is one of the top five in the global aircraft finance sector, and last year announced two deals to purchase 195 planes from Airbus and Boeing for close to $20 billion.

Latest accounts filed for SMBC show that it earned revenues of $771 million in 2014, an 18.5 per cent increase on the previous year.

Operating profits rose more than 13 per cent to $409.6 million from $362 million.

Profit before tax came to $212.2 million for 2014. This compares with a loss of €120 million in the previous year, which was down to $321 million break costs – charges associated with ending aircraft leases. Break costs were $3.1 million in 2014.

The balance sheet shows that net assets at the end of the year were $1.165 billion, an 18 per cent increase on the $983 million recorded on December 31st, 2013.

At the end of 2014 it owned aircraft worth $9.2 billion. It had borrowings of almost $5.5 billion.

The group had 113 staff in 2014, compared with 73 the previous year. Chief executive Peter Barrett told The Irish Times recently that the company was continuing to hire staff.

SMBC is owned by a consortium of the Sumitomo Financial Group and the Sumitomo Corporation, two the biggest companies in Japan.

Japanese shareholders

Its previous owner,

Royal Bank of Scotland

, sold the business in early 2012 to the Japanese shareholders as part of a restructuring forced on the Scottish lender by the financial crisis.

SMBC’s fleet is made up of single-aisle Airbus and Boeing aircraft, which Mr Barrett describes as “the workhorses of the airline industry”.

One of the orders it placed last year was for 80 Boeing 737 Max, the latest version of the 737 craft used by Ryanair. The Irish airline has committed to buying up to 200 of the same model between 2019 and 2024.

SMBC’s Boeing order followed a larger one from Airbus for 115 A320s, which was the biggest placed to date by an Irish company for a single-aisle craft.

The company is headquartered in Dublin, and has offices in Japan, the US and other centres. It leases craft to more than 90 airlines, many of which are based in emerging markets.

Another Irish aircraft lessor, New York-listed Avolon, is due to publish its 2014 results tomorrow.