TIDMDNA
RNS Number : 7654A
Doric Nimrod Air One Limited
03 April 2012
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THE INFORMATION
CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR
SALE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS
UNLAWFUL.
DORIC NIMROD AIR ONE LIMITED
Announcement of Asset Manager's Report
3 April 2012
Doric Nimrod Air One Limited (the "Company"), a new
Guernsey-domiciled company, is pleased to present the quarterly
Fact Sheet in respect of the period from 1 January 2012 to 31 March
2012.
Doric Asset Finance Limited, the Company's Asset Manager, has
provided the Company with this commentary on the Company's airplane
and a copy of their report is appended below for the benefit of
shareholders.
*****
On the invitation of the directors of the Company, the following
commentary has been provided by Doric Asset Finance Limited as
Asset Manager of the Company and is provided without any warranty
as to its accuracy and without any liability incurred on the part
of the Company, its directors and officers and service providers.
The commentary is not intended to constitute, and should not be
construed as, investment advice. Potential investors in the Company
should seek their own independent financial advice and may not rely
on this communication in evaluating the merits of an investment in
the Company. The commentary is provided as a source of information
for shareholders of the Company but is not attributable to the
Company.
QUARTERLY FACT SHEET
DORIC NIMROD AIR ONE LIMITED
LSE: DNA
CISX: DNA
The Company
Doric Nimrod Air One Limited ("DNA") is a Guernsey domiciled
company which listed on the Specialist Fund Market of the London
Stock Exchange and the Channel Islands Stock Exchange on 13(th)
December 2010. DNA has purchased one Airbus A380-861 aircraft,
manufacturer's serial number (MSN) 016, which it has leased to
Emirates Airlines, the national carrier owned by the Investment
Corporation of Dubai, based in Dubai, United Arab Emirates.
Investment Strategy
DNA's investment objective is to obtain income returns and a
capital return for its Shareholders by acquiring, leasing and then
selling a single aircraft. DNA will receive income from the lease
and its directors intend to target a gross distribution to
shareholders of 2.25 pence per share per quarter (9p per
annum).
1. The Doric Nimrod Air One Airbus A380
The Airbus A380 with manufacturer's serial number (MSN) 016 is
registered in the United Arab Emirates under the registration mark
A6-EDC. For the period from original delivery of the aircraft to
Emirates in November 2008 until the end of February 2012, a total
of 1,780 flight cycles were registered. Total flight hours were
14,542. This is equal to an average flight duration of
approximately eight hours.
Amongst its 169 aircraft in operation as of March 2012, Emirates
has a fleet of 21 A380s which currently serve 17 destinations
worldwide: Auckland, Bangkok, Beijing, Hong Kong, Jeddah,
Johannesburg, Kuala Lumpur, London Heathrow, Manchester, Munich,
New York JFK, Paris, Rome, Seoul, Shanghai, Sydney and Toronto.
Amsterdam will become the 19th A380 point after an A380 deployment
to Tokyo in July. Recent visits of the A380 owned by the Company
(MSN 016) included London, Munich, New York and Sydney during the
first quarter of 2012.
Company Facts (31st March 2012)
-----------------------------------------------------------------
Listing LSE and CISX
------------------------------ ---------------------------------
Ticker DNA
------------------------------ ---------------------------------
Share Price 115.5p
------------------------------ ---------------------------------
Market Capitalisation GBP49 million
------------------------------ ---------------------------------
Anticipated Dividend 2.25p per quarter (9p per annum)
------------------------------ ---------------------------------
Anticipated Dividend Payment April, July, October, January
Dates
------------------------------ ---------------------------------
Currency GBP
------------------------------ ---------------------------------
Launch Date/Price 13(th) December 2010 / 100p
------------------------------ ---------------------------------
Incorporation Guernsey
------------------------------ ---------------------------------
Asset Manager Doric Asset Finance Limited
------------------------------ ---------------------------------
Corp & Shareholder Advisor Nimrod Capital LLP
------------------------------ ---------------------------------
Administrator Anson Fund Managers Ltd
------------------------------ ---------------------------------
Auditor Ernst and Young LLP
------------------------------ ---------------------------------
Market Makers Shore Capital Ltd
Winterflood Securities Ltd
------------------------------ ---------------------------------
SEDOL, ISIN B4MF389 , GG00B4MF3899
------------------------------ ---------------------------------
Year End 31(st) March
------------------------------ ---------------------------------
Stocks & Shares ISA Eligible
------------------------------ ---------------------------------
Website www.dnairone.com
------------------------------ ---------------------------------
Maintenance status
Emirates maintains its A380 aircraft fleet based on a
maintenance program according to which minor maintenance checks are
performed every 1,500 flight hours and more significant maintenance
checks (so called C checks) every 24 months or 12,000 flight hours,
whichever comes first. The next C check is expected to fall due in
the last quarter of 2012.
Inspections
The next inspection of the aircraft by the asset manager is
scheduled during the aforementioned C check later in 2012.
Hairline Cracks
Since late 2011, hairline cracks have been discovered in a small
number of L-shaped metal brackets within the wing structure of some
A380s. There are 2,000 brackets (known as rib-skin attachments or
wing rib feet) in each 9,100-square-foot wing, which attach the
wing's upper and lower skins to ribs running throughout the wing.
Only a handful of brackets on any given aircraft were found to have
cracks. The aircraft remain fully airworthy and pose no risk to
flight safety as affirmed by EASA and Airbus.
Airbus has traced the source of the cracking in A380 wing
structures to the choice of a less flexible aluminum alloy used to
make the wing brackets and the stresses involved during the
manufacturing process when sections of the wing are put together.
The airframer has started to implement changes in the manufacturing
process to ensure that wing assembly does not generate unforeseen
stresses. Airbus has also developed a fix for affected aircraft by
supplying repair kits as well as providing technical and logistical
support to its airline customers.
In early February the European Aviation Safety Agency ("EASA")
issued an updated airworthiness directive ("AD") in relation to
certain wing rib feet cracks on A380s, which replaced an earlier AD
from 20th January 2012. This latest AD called for all A380s in
operation to be inspected. This should also help to collect more
information about the issue. Under the new directive, the seven
airlines currently operating A380s must carry out checks and
preliminary repairs on every plane before its 1,300th flight.
Aircraft already approaching or beyond the threshold must be
checked and repaired almost immediately. The aircraft owned by the
Company (MSN 016) was recently inspected in March 2012. The cracks
detected on this occasion were repaired. The aircraft has since
returned to normal commercial service.
Airbus is also in the process of defining more specific
inspection and repair activities as well as a permanent solution to
prevent the appearance of any cracks in the future. Both the
present repairs, which basically involve replacing cracked rib feet
with new rib feet, as well as the future prevention measures, will
be covered by the applicable manufacturer's warranties. In the
meantime airlines with A380s on lease will continue to operate the
aircraft and their lease rental obligations will remain absolute
and unconditional on these events.
While this AD has received a fairly large amount of press
interest, there are hundreds of ADs issued for commercial aircraft
every year by different aviation authorities which together with
aircraft manufacturers monitor, control and ensure the continued
safe operation of commercial aircraft.
2. Market Overview
The International Air Transport Association (IATA) reported that
full year 2011 passenger demand rose 5.9 per cent compared to 2010,
in line with long-term growth trends. In contrast, cargo markets
contracted by 0.7 per cent for the year. Growth in demand lagged
capacity increases at 6.3 per cent (passenger) and 4.1 per cent
(cargo) putting downward pressure on load factors. The average
passenger load factor for 2011 was 78.1 per cent (2010: 78.3 per
cent), while the freight load factor was 45.9 per cent (2010: 48.1
per cent). IATA estimated that despite the challenging economic
environment the global aviation industry generated an operating
profit of USD 7.9 billion in 2011 (2010: USD 15.8 billion).
At the end of last year IATA predicted passenger demand to
increase by 4.0 per cent in 2012, while cargo was expected to show
flat growth. International passenger demand rose 5.5 per cent in
January year over year. Middle East airlines showed the strongest
traffic growth with 14.5 per cent in January compared to the same
month last year followed by Latin American carriers (+7.9 per cent)
and Asia-Pacific airlines (+6 per cent). Air freight kilometers
flown were 8 per cent below January 2011 levels. However, there
were major distortions to the data in January due to the Chinese
New Year holiday occurring a month earlier than last year. In
January, holiday travel and factory closures boosted revenue
passenger kilometers and depressed air freight kilometers by
several percentage points.
IATA issued a revised forecast on 20th March 2012 stating that
airline industry profit will more than halve in 2012, falling to
USD 3 billion as oil prices rise. This USD 500 million reduction
from the December forecast is primarily driven by a rise in the
expected average price of oil to USD 115 per barrel, up from the
USD 99 per barrel previously forecast. Although IATA had concerns
at the beginning of the year that an unsolved sovereign debt crisis
in the Eurozone could result in a more severe banking crisis and
more widespread economic weakness in 2012, sharply rising oil
prices have replaced Eurozone debt as the major downside risk in
recent weeks. Political tensions in the Gulf region increase the
risk of significantly higher oil prices, the implications of which
could put the industry into losses.
In 2011 the airframe manufacturers Airbus and Boeing managed to
deliver for the first time more than 1,000 aircraft. Boeing's
production is set to rise by 20 per cent this year to 585-600
aircraft, while Airbus forecasts around 575 deliveries, which would
put their combined output in 2012 at over 1,150 aircraft.
Source: IATA
3. Lessee - Emirates Key Financials and Outlook
The aircraft is leased to Emirates for an initial term of 12
years, with fixed lease rentals for the duration.
For the first six months of the current financial year 2011/2012
ending 30th September 2011, Emirates generated a net profit of USD
225 million despite paying USD 1 billion more in fuel costs
compared with the same period last year and despite fluctuating
exchange rates. Net profit for the same period in the last business
year was USD 925 million. In addition, the company's revenues
increased by 15 per cent per annum to USD 8.3 billion over the same
time period. At the same time the airline posted strong business
growth both in terms of capacity on offer and traffic carried.
Capacity measured in Available Seat Kilometers (ASKM), grew by 8.2
per cent, whilst passenger traffic carried measured in Revenue
Passenger Kilometers (RPKM) was up 5.7 per cent. Therefore, the
Passenger Seat Factor declined slightly compared to the same period
of the last business year but sustained at a level of 79.3 per
cent.
Emirates' cash position on 30th September 2011 remained at about
USD 3.8 billion, almost the same level as on 31st March 2011 at the
begin of the business year.
Business figures for the whole business year 2011/2012 are
expected to be announced sometime in May 2012. The president of
Emirates, Tim Clark, already indicated in late March 2012 that
Emirates's fuel bill accounts for 45 percent of costs and may jump
by USD 1.7 billion in the year ending March 31. Clark also added
that Emirates is nevertheless sticking with a no-hedging strategy
rather than risking a losing bet.
The Emirates fleet carries more than 30 million passengers per
year to a network of currently 122 cities. The airline has already
launched seven new routes in 2012. Buenos Aires and Rio de Janeiro
were added at the beginning of 2012, followed by Dublin later in
January. February saw the addition of new African routes to Lusaka
and Harare and an ultra-long-haul service to Dallas-Fort Worth
while March saw service commence to Seattle. The route expansion
will continue with a new service to Ho Chi Minh City in June,
Barcelona in July and Washington DC in September.
To sustain this growth the airline seeks to hire 450 pilots and
around 4,000 cabin crew in the next fiscal year starting from 1st
April 2012.
Source: Emirates
4. Aircraft - A380
At the end of February 2012, the global A380 fleet consisted of
71 planes that were in service with seven operators: Emirates (21
A380 aircraft), Singapore Airlines (16), Qantas (12), Deutsche
Lufthansa (8), Air France (6), Korean Airways (5) and China
Southern Airlines (3). In 2012, two new operators - Thai Airways
and Malaysian Airlines - will join the existing seven airlines
family of A380 operators. With close to 30 more expected to be
delivered over the year, the in-service fleet will approach 100 by
the end of 2012.
A380s are flying on some 50 routes to 28 destinations, and
operate to/from 12 of the top 20 airports in total passenger
throughput and 14 of world largest international airports. Airbus
secured gross orders for 29 A380s in 2011. In early January 2012
Airbus won a contract from Hong Kong Airlines Ltd. for 10 A380s.
The order lifts Airbus's A380 backlog to 182 planes.
Quellen: IATA, Boeing, Airbus
For further information, please contact:
For administrative and company information:
Anson Fund Managers Limited
+44 (0) 1481 722260
For shareholder information:
Nimrod Capital LLP
Richard Bolchover and Marc Gordon
+44 (0) 20 3355 6855
END OF ANNOUNCEMENT
E&OE - in transmission.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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