TIDMDNA
RNS Number : 1818X
Doric Nimrod Air One Limited
08 January 2014
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,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
8 January 2014
Doric Nimrod Air One Limited (the "Company"), a
Guernsey-domiciled company, is pleased to present the quarterly
Fact Sheet in respect of the period from 1 October 2013 to 31
December 2013.
Doric GmbH, 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 GmbH 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
CISE: DNA
The Company
Doric Nimrod Air One Limited ("the Company") 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
December 2010. The Company has purchased one Airbus A380-861
aircraft, manufacturer's serial number (MSN) 016, which it has
leased for an initial term of 12 years, with fixed lease rentals
for the duration, to Emirates Airlines ("Emirates"), the national
carrier owned by the Investment Corporation of Dubai, based in
Dubai, United Arab Emirates.
Investment Strategy
The Company's investment objective is to obtain income returns
and a capital return for its shareholders by acquiring, leasing and
then selling a single aircraft. The Company receives income from
the lease and its directors are targeting a gross distribution to
shareholders of 2.25 pence per share per quarter (9p per annum). It
is anticipated that income distributions will continue to be made
quarterly.
Company Facts (31 December 2013)
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Listing LSE and CISE
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Ticker DNA
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Share Price 118.0 pence
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Market Capitalisation GPB 50 million
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Aircraft Registration A6-EDC
Number
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Anticipated Dividend 2.25p per quarter (9p per annum)
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Anticipated Dividend Payment April, July, October, January
Dates
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Currency GBP
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Launch Date/Price 13(th) December 2010 / 100p
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Incorporation Guernsey
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Asset Manager Doric GmbH
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Corp & Shareholder Advisor Nimrod Capital LLP
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Administrator JTC Fund Managers (Guernsey) Limited
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Auditor Deloitte LLP
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Market Makers Shore Capital Ltd
Winterflood Securities Ltd
Jefferies International Limited
Numis Securities Limited
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SEDOL, ISIN B4MF389 , GG00B4MF3899
----------------------------- -------------------------------------
Year End 31(st) March
----------------------------- -------------------------------------
Stocks & Shares ISA Eligible
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Website www.dnairone.com
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1. The Doric Nimrod Air One Airbus A380
The Airbus A380 with the 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 November 2013, a
total of 2,718 flight cycles were registered. Total flight hours
were 22,691. This equates to an average flight duration of
approximately eight hours and 20 minutes.
The A380 owned by the Company visited Auckland, Hong Kong,
London Heathrow, Melbourne, Moscow, and Sydney during the fourth
quarter of 2013.
Maintenance status
Emirates maintains its A380 aircraft fleet based on a
maintenance programme according to which minor maintenance checks
are performed every 1,500 flight hours, and more significant
maintenance checks (C checks) at the earlier of 24 months or 12,000
flight hour intervals. The second C check of the aircraft took
place in the Emirates engineering facility at Dubai International
Airport in November 2012. The next heavy maintenance check will be
the 6-year check (which will include the third C check) scheduled
for November 2014.
Emirates bears all costs (including maintenance, repair and
insurance) relating to the aircraft during the lifetime of the
lease.
Inspections
The asset manager Doric inspected the aircraft during the
above-mentioned C check in November 2012. The aircraft's physical
condition was good and consistent with its age. After four years in
service at that time, the passenger cabin has undergone some
significant refurbishment work, including replacement of soft
furnishings and floor coverings.
Hairline Cracks
In late 2011, hairline cracks were detected in a small number of
L-shaped metal brackets (known as wing rib feet) within the wing
structure of some A380s. The aircraft remains fully airworthy and
the hairline cracks pose no risk to flight safety as affirmed by
the European Aviation Safety Agency (EASA) and Airbus.
As previously reported, EASA released its latest Airworthiness
Directive in May 2013, outlining which modifications need to be
made and the respective compliance terms. The wing rib feet
modification programme for Emirates' aircraft is essentially
managed by Airbus. All modification activities will be covered by
the applicable manufacturer's warranties. Emirates decided to
embody all modifications in one step. The downtime required to
incorporate the permanent fix has in some cases been reduced from
the originally planned eight weeks down to 51 days. Subject to
changes in Emirates' timeline it is currently envisaged to
implement the final fix for MSN 016 from mid-February to mid-April
2014. The modification work on the A380 owned by the Company will
be completed by ADAT (Abu Dhabi Aircraft Technologies). Some
aircraft of Emirates' A380 fleet have already been modified and
returned to commercial service.
2. Market Overview
Between January and October 2013, passenger demand, measured in
revenue passenger kilometres (RPKs), expanded by 5.2% compared to
the same period in the previous year. The industry remains on a
growth path, which started in the fourth quarter of 2012. Pace of
growth slightly accelerated since July 2013. In October 2013 RPKs
increased by 6.6% compared to the same month of the preceding year.
Tony Tyler, Director General and CEO of International Air Transport
Association (IATA), expects a strong fourth quarter traffic
performance, since business confidence has been rising and major
advanced economies show a better economic performance.
After airlines were reluctant to increase their capacities until
autumn 2013, operators responded with a capacity increase in
October in order to match the higher demand. They increased the
available seat kilometres (ASKs) by 0.8% compared to September. At
the same time RPKs increased by 0.4%.
The average passenger load factor during the first ten months of
this year was 79.9%. This is an increase of 0.4%-points compared to
the same period the year before. From a historic perspective
passenger load factors remain stable on a high level. In 2014
worldwide passenger load factors could exceed 81% for the first
time in the industry's history. According to the latest traffic
forecast released by IATA in December 2013, RPKs are expected to
grow by 5.3% in 2013 and 6.0% in 2014. Both numbers were slightly
upgraded since the previous publication from September 2013.
As in the quarters before, regional growth patterns continue to
be uneven. Between January and October 2013 Middle East airlines
increased their RPKs by 11.2% compared to the previous year's
period, leading the list of growth regions. The most modest growth
was again observed in North America with an increase in RPKs of
2.1% compared to the same period in the previous year.
During the third quarter 2013 air freight markets started
responding to better economic confidence and improved consumer
demand. According to the latest available numbers published by
IATA, between January and October 2013 flown
freight-tonne-kilometres (FTKs) increased by 0.8% compared to the
same period the year before. The average load factor for the
10-month period until October 2013 reached 44.8%. But matching
capacity and demand is still a tough business, because passenger
traffic and hence belly capacity is growing more robustly than the
air freight business. With a FTK increase of 12.3% during the first
ten months of 2013, the Middle East remains the most active region
in terms of growth. For 2014 IATA expects an overall expansion of
the air freight market of 2.1%, which is significantly below the
long-term cargo growth trend of 5 to 6% a year.
Airlines have benefited from a slight relief in jet fuel prices
over the last few quarters. As a consequence, IATA recently
adjusted the 2013 average cost per barrel down to USD 124.00. This
is USD 2.40 per barrel below the forecast from September 2013.
IATA released its latest industry outlook in December 2013
according to which global industry profits are expected to reach
USD 12.9 billion in 2013. This is higher than IATA's September 2013
estimate of USD 11.7 billion. Improving efficiencies of the
carriers operations and higher aircraft utilization influenced
airline performance positively. For 2014 IATA also increased its
expectations, forecasting an industry net profit of USD 19.7
billion. Industry experts paint a mixed picture of the near future:
The economic growth in the developed economies will further
improve. But on the other hand BRIC countries (Brazil, Russia,
India, China) will likely show a relatively modest growth
trajectory.
According to the recently published IATA Airline Industry
Forecast 2013-2017 airlines expect until the year 2017 an increase
in passenger numbers of 31% or 930 million compared to the
reference year 2012. This number would imply a compound annual
growth rate of 5.4%. In a regional breakdown, the Middle East is
expected to record the strongest international passenger growth
rate of 6.3% p.a.
In December Airbus has increased its sales target for 2013 once
again. The European airframer expects to sell more than 1,400
aircraft in 2013.
Source: Handelsblatt, IATA
3. Lessee - Emirates Key Financials and Outlook
In the first six months of the current financial year (ending on
30 September 2013) revenue reached a record high of USD 10.8
billion, up by 12% compared to the same period in the financial
year before. According to His Highness Sheikh Ahmed bin Saeed Al
Maktoum, Chairman and Chief Executive of Emirates, "the global
business environment continues to be challenging". Nevertheless the
lessee increased its net profit by 2% to USD 475 million. However
persistent high fuel prices and an unfavorable currency exchange
environment burden the airline's profits.
As of 30 September 2013 the balance sheet total amounted to USD
25.1 billion, a decrease of 3% from the end of last financial year.
Total equity increased by 7.9% to USD 6.8 billion with an equity
ratio of 27%. The current ratio was 1.01; therefore the airline
would be able to meet its current liabilities by liquidating all of
its current assets. As of 30 September 2013 the carrier's cash
balance reached USD 4.3 billion, therefore liquidity decreased by
USD 2.4 billion within six months. This was largely caused by bond
repayments and injections back into the business to fund new
aircraft, engines, spares and other projects.
In the first half of the current financial year, Emirates
continued to invest in and expand its employee base, increasing its
overall staff count by 12.4% to over 51,900 compared with 30
September 2012.
During the first half of the current financial year, Emirates
received ten widebody aircraft, including six Airbus A380. Prior to
March 2014 another 15 new aircraft are scheduled to enter the
fleet. By 2020 Emirates expects to have more than 250 widebody
aircraft in the air serving some 70 million passengers a year. In
order to support its long-term growth ambitions, the carrier has
recently placed the largest ever aircraft order in civil aviation
history. At the Dubai Air Show in November the lessee signed
contracts with Airbus and Boeing in a combined value of USD 99
billion (list prices) consisting of 150 Boeing 777X and another 50
Airbus A380. According to the operator, the first 25 of the
additional A380 will come into service before the first quarter of
2018. Deliveries for 777Xs are scheduled to start in 2020.
As of November 2013 Emirates operates flights to 137
destinations in 77 countries on six continents. Since January 2012
Emirates has launched more than 20 new destinations. By the end of
the fiscal year in March 2014, at least another four will enlarge
the global route network . The airline currently operates nearly
3,200 flights per week. Every three minutes an Emirates aircraft
takes off anywhere in the world. A continuously growing fleet
enabled an increase in ASKs. During the first six months of the
current business year until September 2013 the lessee offered 16.9%
more ASKs than a year ago. At the same time demand increased by
16.1%. Notwithstanding the tremendous growth Emirates is able to
match supply and demand in order to keep the load factor at high
levels. During the first half of the current financial year,
passenger load factor averaged 79.2%.
Source: Emirates
4. Aircraft - A380
As of November 2013 Emirates has a fleet of 41 A380s which
currently serve 23 destinations worldwide: Amsterdam, Auckland,
Bangkok, Beijing, Brisbane, Hong Kong, Jeddah, Kuala Lumpur, London
Heathrow, Los Angeles, Manchester, Mauritius, Melbourne, Moscow,
Munich, New York JFK, Paris, Rome, Seoul, Shanghai, Singapore,
Sydney and Toronto. With Los Angeles becoming an A380 destination
at the beginning of December 2013, Emirates has launched the
world's longest A380 service in operation, crossing the Russian
Federation, the North Pole and Eastern Canada. Scheduled flight
time is 16 hours and 20 minutes. On 1 January 2014 Zurich will
become Emirates' 24(th) A380 destination, followed by Barcelona on
1 February 2014. Growing passenger demand causes the Middle
East-based carrier to increase A380 frequencies on established
routes. Starting in March 2014 the second daily flight to Munich,
currently served by a Boeing 777-300ER, will be upgraded to an A380
service.
At the end of November 2013, the global A380 fleet consisted of
119 commercially used planes in service. The currently ten
operators are Emirates (41 A380 aircraft), Singapore Airlines (19),
Qantas (12), Deutsche Lufthansa (10), Air France (9), Korean
Airways (8), China Southern Airlines (5), Malaysia Airlines (6),
Thai Airways (6) and British Airways (3). Qatar Airways and South
Korea's Asiana Airlines will join the club of A380 operators when
they take delivery of their first aircraft in 2014. The order book
for A380 aircraft has expanded considerably over the last quarter.
In November 2013 Emirates announced at the Dubai Air Show to buy
another 50 A380s in addition to the 90 already ordered. This brings
the number of unfilled orders at Airbus to 189 aircraft by the end
of November 2013.
According to Airbus, the worldwide fleet has accumulated around
1.1 million flight hours in more than 137,000 commercial flights.
The number of passengers flying aboard an Airbus A380 to date is
over 50 million. The global fleet's average daily utilization is
greater than 13 hours.
Source: Airbus, Ascend, Emirates
Contact Details
Company
Doric Nimrod Air One Limited
PO Box 156, Frances House
Sir William Place, St Peter Port
Guernsey GY1 4EU
Tel: +44 (0) 1481 722260
Website: www.dnairone.com
Corporate & Shareholder Advisor
Nimrod Capital LLP
3 St. Helen's Place
London EC3A 6AB
Tel: +44 (0) 20 3355 6855
Website: www.nimrodcapital.com
END OF ANNOUNCEMENT
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The company news service from the London Stock Exchange
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