TIDMDNA
RNS Number : 1546T
Doric Nimrod Air One Limited
01 October 2014
QUARTERLY FACT SHEET
30 September 2014
DORIC NIMROD AIR ONE LIMITED
LSE: DNA
The Company
Doric Nimrod Air One Limited ("the Company") is a Guernsey
domiciled company which listed on the Specialist Fund Market (SFM)
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 Airline ("Emirates"), the national
carrier owned by the Investment Corporation of Dubai, based in
Dubai, United Arab Emirates.
In 2014 the Specialist Fund Market (SFM) was deemed a
recognisable market for Individual Savings Accounts (ISA). As a
result the listing on the Channel Islands Stock Exchange, which had
served this purpose previously, was cancelled. The Company's shares
are therefore now only traded on the SFM of the London Stock
Exchange.
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
the 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 (30 September 2014)
Listing LSE
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Ticker DNA
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Share Price 113.25p
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Market Capitalisation GBP 48.1 million
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Aircraft Registration A6-EDC
Number
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Current/Future Anticipated 2.25p per quarter (9p per annum)
Dividend
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Dividend Payment Dates April, July, October, January
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Currency GBP
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Launch Date/Price 13 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) Ltd
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Auditor Deloitte LLP
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Market Makers Jefferies International Ltd/
Numis Securities Ltd/
Shore Capital Ltd/
Winterflood Securities Ltd/
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SEDOL, ISIN B4MF389, GG00B4MF3899
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Year End 31 March
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Stocks & Shares ISA Eligible
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Website www.dnairone.com
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Asset Manager's Comment
1. The Doric Nimrod Air One Airbus A380
The Airbus A380 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
August 2014, a total of 3,052 flight cycles were registered. Total
flight hours were 25,487. This equates to an average flight
duration of approximately eight hours and 20 minutes.
The A380 owned by the Company visited Auckland, Munich, New
York, Sydney and Toronto during the third quarter of 2014.
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) and is
currently planned to start in October 2014.
Emirates bears all costs (including maintenance, repair and
insurance) relating to the aircraft during the lifetime of the
lease.
Inspections
As previously reported, a technical records audit was carried
out in the second half of June 2014. The lessee was again very
helpful in the responses given to the asset manager's technical
staff and the technical documentation was found to be in good
order.
2. Market Overview
From January to July 2014 passenger demand, measured in revenue
passenger kilometres (RPKs), expanded by 5.9% compared to the same
period the year before. Demand gained momentum especially during
the second quarter of this year. Between January and July 2014
airlines increased their capacities, measured in available seat
kilometres (ASKs), by 5.6%. Operators are adhering to their
strategy to expand their supply carefully.
The average passenger load factor during the first seven months
of this year was 79.3%. This is a decrease of 0.2 percentage points
compared to the same period the year before. From a historic
perspective passenger load factors remain at a high level. In 2014
worldwide passenger load factors could exceed 80% for the first
time in the industry's history. According to the latest traffic
forecast released by the International Air Transport Association
(IATA) in June 2014, RPKs are expected to grow by 5.9% in 2014 and
6.7% in 2015. Tony Tyler, IATA's General Director and CEO, expects
that "despite the various economic challenges, the outlook for
passenger travel remains broadly positive". But events, like the
Ebola outbreak in West Africa, the conflict between the Ukraine and
Russia and Eurozone's economic situation, present ongoing
uncertainty.
A regional breakdown reveals that the Middle East airlines
continue to outperform the overall market in 2014. RPKs increased
by 12.3% during the first seven months of this year compared to the
same period the year before. Second best were Asia/Pacific based
operators with 6.8%. Latin America grew by 6.5% and 6.0% growth in
Europe was virtually in line with the market average across all
regions. North American market participants recorded 2.7% more
RPKs. In Africa there was no growth in the number of RPKs.
IATA released its latest industry outlook in June 2014 according
to which global industry profits are expected to reach USD 18.0
billion in 2014. With a net profit margin of just 2.4%, the
aviation industry's buffer to absorb external shocks remains fairly
small.
Source: IATA
3. Lessee - Emirates Key Financials and Outlook
Emirates announced its 26(th) consecutive year of profit and
company-wide growth for the financial year ended on 31 March 2014,
despite competitive pressure and a global economic environment that
is only slowly recovering.
Revenue reached a record high of USD 22.5 billion, up by 13%
compared to the previous financial year, and continues to be well
balanced with no region contributing more than 30%. East Asia and
Australasia remained the highest revenue contributing regions with
USD 6.5 billion, up 14.1% from 2012/2013. Gulf and Middle East (up
16.6% to USD 2.3 billion), Europe (up 16.3% to USD 6.4 billion) and
Africa (up 15.1% to USD 2.1 billion) saw the most significant
growth rates, reflecting new destinations as well as increased
frequency and capacity to these regions.
The airline posted a net profit of USD 887 million, representing
an increase of 43% over last year's results. With a share of nearly
40% fuel remains the largest operating cost category. Compared to
last financial year, the average price of jet fuel was slightly
lower relieving the carrier's bottom line. Due to the growing fleet
Emirates' fuel bill increased by 10% to reach USD 8.4 billion.
Total operating costs showed a smaller increase (+11.5%) than the
revenues (+13%) in the financial year 2013/2014 resulting in an
improved profit margin of 3.9%.
As of 31 March 2014 the balance sheet total amounted to USD 27.7
billion, an increase of 7.2% from the previous year. Total equity
increased by 10.6% to USD 6.9 billion with an equity ratio of
25.1%. The current ratio was 0.84; therefore the airline would be
able to meet most of its current liabilities by liquidating all of
its current assets. Significant items on the liabilities side of
the balance sheet included finance leases in the amount of USD 8.6
billion and revenues received in advance from passenger and freight
sales (USD 3.1 billion). As of 31 March 2014 the carrier's cash
balance was USD 4.5 billion.
Between April 2013 and March 2014, as compared to the prior
financial year, the airline's ASKs increased by 14.6%. Measured in
RPKs passenger traffic grew by 14.2%, resulting in an average
passenger load factor of 79.4%. This is slightly below the 79.7%
reached in the period before. A record 44.5 million passengers flew
with Emirates between April 2013 and March 2014 - an increase of
13.1% compared to the previous period.
During the last financial year the airline received 24 widebody
aircraft, including 16 Airbus A380s, 6 Boeing 777-300ER and 2
Boeing 777-200LRF aircraft. At the Dubai Air Show in November 2013
Emirates signed contracts with Airbus and Boeing for 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 the 777Xs are scheduled to start in
2020. By that year Emirates expects to have more than 250 widebody
aircraft in the air serving some 70 million passengers a year.
As of 31 August 2014 Emirates had 227 widebody aircraft in
operation. All Emirates' aircraft temporarily parked during the
80-day runway upgrading works at Dubai International Airport, which
lasted from May to July 2014, returned to service. The works
included resurfacing, upgraded lights, additional taxiways and
high-speed exits.
The number of Emirates orders yet to be delivered at the end of
August was 293 aircraft. The airline operates the world's largest
fleets of Airbus A380 and Boeing 777-300ER aircraft. During the
financial year 2013/2014 Emirates raised USD 3.3 billion in new
funding mainly to secure its on-going fleet expansion. The carrier
made use of a variety of financing structures to meet its
refinancing needs, including a second Enhanced Equipment Trust
Certificate (EETC) issue through a subsidiary of Doric Nimrod Air
Three Ltd.
With its increased fleet and resources, Emirates launched nine
additional destinations during the last financial year. In
September 2014 Emirates operated flights to 145 destinations in 82
countries on six continents. During the calendar year 2013 the
airline's fleet travelled more than 751 million kilometres,
circling the globe over 18,000 times and carrying over 43 million
passengers.
In the current financial year the airline has already added
another four passenger routes including Abuja (Nigeria), Brussels,
Chicago, and Oslo. Budapest (Hungary) is scheduled for the end of
October 2014.
In September 2014 Dubai Airports, which owns and manages Dubai
International (DXB) and Al Maktoum International (DWC), announced a
USD 32 billion expansion plan for DWC. In the first stage
facilities will be upgraded to accommodate up to 120 million
passengers annually. Completion is planned within the next six to
eight years. It is expected that Emirates will relocate its
international hub operations to DWC by the mid-2020s. Due to
limited options to increase the capacity at DXB beyond 100 million
passengers, DWCs expansion is vital to support Emirates Airline's
long-term growth plans. According to Dubai Airports the new
facilities are designed to service 100 Airbus A380 at the same
time. Emirates is already using DWC for its cargo operations.
Source: Ascend, Dubai Airports, Emirates, Flightglobal
4. Aircraft - A380
As of September 2014 Emirates had a fleet of 52 A380s which
currently serve 29 destinations from its Dubai hub: Amsterdam,
Auckland, Bangkok, Barcelona, Beijing, Brisbane, Frankfurt, Hong
Kong, Jeddah, Kuala Lumpur, Kuwait, London Gatwick, London
Heathrow, Los Angeles, Manchester, Mauritius, Melbourne, Moscow,
Mumbai, Munich, New York JFK, Paris, Rome, Seoul, Shanghai,
Singapore, Sydney, Toronto and Zurich. Dallas (1 October), San
Francisco (1 December), and Houston (3 December) will be added in
the course of 2014. Less than a year after Emirates' initial A380
launch to Mauritius the airline announced the introduction of a
second daily A380 service. Starting on 26 October and more than a
month ahead of schedule the superjumbo will replace a Boeing 777
with an increased capacity of 1,890 seats per week. Emirates has a
further 88 Airbus A380s on order and has expressed an intention to
order further aircraft providing Airbus is willing to make
available a reengined version of the type, A380neo.
The global A380 fleet consisted of 139 commercially used planes
in service at the end of August 2014. The eleven operators are
Emirates (51 A380 aircraft), Singapore Airlines (19), Qantas (12),
Deutsche Lufthansa (12), Air France (10), Korean Airways (10),
China Southern Airlines (5), Malaysia Airlines (6), Thai Airways
(6), British Airways (6) and Asiana (2) at this point in time. On
16 September Qatar Airways accepted its first Airbus A380. Starting
in October Qatar's first A380 route will connect London Heathrow
with its recently finished hub Hamad International Airport in
Doha.
At the end of August 2014 the number of undelivered orders
amounted to 178 aircraft. This number takes into account the
cancellation of six aircraft which were originally ordered by
Skymark Airlines. In July 2014 Airbus announced that it was
terminating the entire purchase order, which was placed by the
Japan-based carrier back in 2011.
According to Airbus, in the period from the aircraft's first
introduction to September 2014 the combined worldwide A380 fleet
has accumulated over 1.5 million flight hours on some 180,000
commercial flights. The number of passengers who have flown aboard
an Airbus A380 to date is over 65 million.
Source: Airbus, Ascend, Emirates, Flightglobal
Contact Details
Company
Doric Nimrod Air One Limited
Frances House, Sir William Place
St Peter Port
Guernsey GY1 4EU
Tel: +44 1481 702400
www.dnairone.com
Corporate & Shareholder Advisor
Nimrod Capital LLP
3 St Helen's Place
London EC3A 6AB
Tel: +44 20 7382 4565
www.nimrodcapital.com
Disclaimer
This document is not intended to be an invitation or inducement
to engage in an investment activity, nor does it constitute an
attempt to solicit offers for the securities of DNA. The
information is believed to be accurate but has not been the subject
of third party verification. DNA does not accept any liability for
the accuracy or otherwise of the information contained herein and
does not accept any liability for actions taken on the basis of the
information provided.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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