TIDMDNA
RNS Number : 4390B
Doric Nimrod Air One Limited
06 January 2015
QUARTERLY FACT SHEET
31 December 2014
DORIC NIMROD AIR ONE LIMITED
LSE: DNA
The Company
Doric Nimrod Air One Limited ("the Company") is a Guernsey
domiciled company, which was 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 (31 December 2014)
Listing LSE
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Ticker DNA
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Share Price 109.0p
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Market Capitalisation GBP 46.3 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
November 2014, a total of 3,123 flight cycles were registered.
Total flight hours were 26,146. This equates to an average flight
duration of approximately eight hours and 20 minutes.
The A380 owned by the Company visited Jeddah, Melbourne, New
York, Sydney and Toronto during the fourth 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 24 month or 12,000 flight hour
intervals, whichever occurs sooner. Between mid-October and early
December 2014 the aircraft underwent extensive maintenance work
consisting of the first six year heavy maintenance check, the third
C check and an A check. This work took place in the airline's
engineering facility at Dubai International Airport. Emirates staff
as well as vendors including Airbus carried out a number of
(non)-mandatory modifications to bring the aircraft up to the
current production standard. During this work the passenger cabin
and the flight deck were largely disassembled for access and
refurbishment.
Emirates bears all costs (including maintenance, repair and
insurance) relating to the aircraft during the lifetime of the
lease.
Inspections
During the above mentioned maintenance work a physical
inspection was carried out by the asset manager and the condition
of the aircraft is considered consistent with its age.
2. Market Overview
From January to October 2014 passenger demand, measured in
revenue passenger kilometres (RPKs), expanded by 5.8% compared to
the same period the year before. The positive growth trend in air
travel is continuing, with a diverse picture across regions.
Stronger economic performance in some regions are accompanied by
emerging downside risks in others. According to the International
Air Transport Association (IATA) the overall outlook for air travel
remains positive with improving demand conditions in the US and
recently increased trade volumes in Asia Pacific. It is expected
that these trends help to offset some adverse developments in other
parts of the world. Between January and October 2014 airlines
increased their capacities, measured in available seat kilometres
(ASKs), by 5.6%.
The average passenger load factor during the first ten months of
this year was 80.2%. This is an increase of 0.3 percentage points
compared to the same period the year before. From a historic
perspective passenger load factors remain at a high level with a
revised industry average of 79.9% during 2014. For 2015 IATA is
forecasting a worldwide passenger load factor of 79.6%, slightly
below the estimate for 2014. The growth in capacity will be driven
by an increased number of aircraft and a higher utilization of the
in-service fleet. RPKs are expected to grow by 5.7% in 2014 and
7.0% in 2015.
A regional breakdown reveals that the Middle East airlines
continue to outperform the overall market in 2014. RPKs increased
by 12.6% during the first ten months of 2014 compared to the same
period the year before. Second best were Asia/Pacific based
operators with 6.8%. Latin America grew by 6.4% and 5.9% growth in
Europe was slightly above the market average across all regions.
North American market participants recorded 2.7% more RPKs. Africa
showed modest growth of 0.7%.
After a sharp decline in oil prices over the last few months,
IATA has revised its fuel price target significantly, expecting in
its report released in December 2014 an average of USD 116.6 per
barrel in 2014 and USD 99.9 in 2015. Fuel is the largest single
operating cost item of airlines and has significant effects on the
industry's profitability. Based on IATA's latest forecasts released
in December 2014, the average share of fuel costs could decrease
substantially from 30.1% in 2013 to 26.1% in 2015 boosting
industry-wide net profits by more than 135% to an estimate of USD
25 billion. The associated net profit margin of 3.2% would be the
highest for more than a decade.
Source: IATA
3. Lessee - Emirates Key Financials and Outlook
Emirates recorded steady performance and significant growth
during the first six months of the financial year 2014/15 ending on
31 March 2015. Revenue, including other operating income, reached a
record high of USD 12.0 billion, up by 11% compared to the same
period in the previous financial year.
The airline posted a net profit of USD 514 million, representing
an increase of 8% over last half year results. According to His
Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief
Executive of Emirates Airline and Group, the bottom line was
influenced by the 80-day runway upgrading works from May to July
2014 at Dubai International Airport. Due to capacity constraints
during this time, the lessee temporarily grounded some of its
aircraft. Profitability was further challenged by a strong US
dollar against major revenue-generating currencies. Relieving
effects from lower oil prices were limited in the six months period
until end of September 2014. The airline's fuel bill accounted for
38% of operating costs compared with 39% in the same period the
year before.
As of 30 September 2014 the balance sheet total amounted to USD
29 billion, an increase of 4.8% against the beginning of the
financial year. Total equity increased by 8.7% to USD 7.5 billion
with an equity ratio of 26%. The current ratio was 0.82; 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 current and
non-current borrowings and lease liabilities in the amount of USD
12.9 billion. As of 30 September 2014 the carrier's cash balance
was USD 3.7 billion, down by USD 832 million compared with the
beginning of the current financial year. Liquidity was mainly spent
on investments in new aircraft and other airline related
infrastructure projects.
Between April and September 2014, as compared to the first six
months in the prior financial year, the airline's ASKs increased by
6.5%. Measured in RPKs passenger traffic grew by 9.8%, resulting in
an average passenger load factor of 81.5%. This is significantly
above the 79.2% reached in the period between April and September
2013. A record 23.3 million passengers flew with Emirates between 1
April and 30 September 2014 - an increase of 8.4% compared to the
previous financial year's period.
During the first six months of the current fiscal year Emirates
received 13 wide-body aircraft including six Airbus A380 - an
overall capacity increase of 6%. This included the delivery of the
100(th) Boeing 777-300ER to Emirates nearly ten years after the
carrier received its first aircraft of this type. As of 30
September 2014 the carrier's average fleet age was 76 months,
compared to 74 months a year ago.
As of 30 November 2014 Emirates had 229 wide-body aircraft in
operation. According to company sources, Emirates is the world's
largest operator of wide-body passenger aircraft. The number of
Emirates orders yet to be delivered at the end of November 2014 was
287 aircraft. The airline operates the world's largest fleets of
Airbus A380 and Boeing 777-300ER aircraft.
With its increased fleet and resources, Emirates launched eight
additional destinations during the calendar year including Abuja,
Boston, Brussels, Budapest, Chicago, Kiev, Oslo and Taipei. In
December 2014 Emirates operated flights to more than 140
destinations in more than 80 countries on six continents.
Source: Ascend, Emirates, Flightglobal
4. Aircraft - A380
As of December 2014 Emirates had a fleet of 57 A380s which
currently serve 33 destinations from its Dubai hub: Amsterdam,
Auckland, Bangkok, Barcelona, Beijing, Brisbane, Dallas, Frankfurt,
Hong Kong, Houston, Jeddah, Kuala Lumpur, Kuwait, London Gatwick,
London Heathrow, Los Angeles, Manchester, Mauritius, Melbourne,
Milan, Moscow, Mumbai, Munich, New York JFK, Paris, Rome, San
Francisco, Seoul, Shanghai, Singapore, Sydney, Toronto and Zurich.
During the last twelve months Emirates launched ten new A380
destinations in total. At the beginning of December 2014 alone, the
lessee commenced flights to three of these destinations (San
Francisco, Milan, Houston) within three days. Furthermore the
airline has announced an increase in capacity on existing A380
routes and will add further A380 destinations in 2015. Starting in
March the airline will offer a fourth daily service to New York JFK
operated with one of Emirates' A380 aircraft. The first scheduled
A380 flight to Perth will take place on 1 May, upgauging the three
daily services from Dubai to the capital of Western Australia.
Glasgow, Manila, Tehran and Vienna have also experienced the
flagship Emirates aircraft when it touched down for a one off
showcase in 2014.
In early December 2014, Airbus Group's Chief Financial Officer
Harald Wilhelm triggered speculation over the future of the A380
programme when he said during an Airbus investor conference that it
would break even in 2015 and stay in balance through 2018, whether
Airbus decided to upgrade or "discontinue" it. Airbus' CEO Fabrice
Bregier was quick to address any misunderstanding by stating that
Airbus has commercial momentum on the A380 and that the company
will eventually launch a version of the A380 with new engines or
even build an ultra high capacity stretched version with a view to
winning more customers.
The global A380 fleet consisted of 147 commercially used planes
in service at the end of November 2014. The twelve operators are
Emirates (55 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 (8), Asiana (2) and Qatar Airways (2). On 18
December 2014 Etihad Airways joined the list as thirteenth operator
and received its first Airbus A380 with nine more to follow. The
delivery was the 150(th) handover to an A380 operator marking a
milestone for the A380 programme.
At the end of November 2014 the number of undelivered orders
stood at 170 aircraft. Air France announced in December 2014 its
intention to cancel its two outstanding orders for A380s, which
would bring down the total of undelivered orders to 168.
According to Airbus, in the period from the aircraft's first
introduction to December 2014 the combined worldwide A380 fleet has
accumulated over 1.7 million flight hours, taking off or landing
every four minutes on average around the globe. Over 75 million
passengers have flown aboard an Airbus A380 to date. In early
December 2014 Airbus announced there were 94 routes to 44
destinations served by A380 aircraft.
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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