Avation PLC

Good afternoon, ladies and gentlemen, and welcome to the Aviation PLC 2022 Financial Year Results and Investor Update Conference Call. My name is Mark and I'll be your conference moderator for today. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we would like to submit the following poll, and if you would give that your kind of attention, I'm sure the company would be most grateful. I'd now like to hand over to Duncan Scott, Group General Counsel. Good afternoon.

Thank you, and good afternoon to everyone. Today, on 29th of September, Evasion published its unordered will be available for a play on our website. Please note that certain statements in this conference call, including answers to your questions, are forward-looking statements, including without limitation statements regarding our future operations and performance, revenues, operating expenses, other income and expense items. These statements and any projection as to the company's future performance represent management's estimate of future results and speak only as of today, 29th of September, 2022. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information on the factors and risks that may affect Ovation's business are included in Ovation's regulatory announcements from time to time, including its annual report and half-year results announcements. Ovation assumes no obligation to update any forward-looking statements.

Thank you very much for your time. In the year ended 30 June 2022, Evasion has returned to profitability, increased net asset value per share, maintained the liquidity, lowered net debt, and developed its new CO2 strategy. The company is positioned to execute its business strategy as the aviation sector recovers from the pandemic. There has been a significant recent recovery in passenger numbers in the airline industry. The company is optimistic about a future for the leasing industry characterized by high demand for aircraft as the global fleet transitions to low CO2 technology in the coming years. Fleet utilization has improved as unused aircraft have been transitioned. Significant impacts of airline insolvencies and restructurings have mostly been reflected in previous periods and distributions creditors from these insolvencies are now being received. The company is seeing increasing levels of interest from airlines to buy or lease aircraft at sustainable lease rates. Senior lenders willing to lend grants against aircraft assets. These factors confirm the emergence of an industry from the pandemic. The company's strategy will be to focus on leasing modern, low CO2 emissions, fuel efficient aircraft in the future. Aviation is supportive of the aviation industry's goal becoming more sustainable through a transition to new technology, more fuel efficient aircraft engine and the use of sustainable aviation fuel. The company will position itself to return to growth through opportunistic trading and deliveries from its order book in the post pandemic environment. As at 30 June, the company had 39 aircraft in the fleet, serving 17 different customers in 14 countries. Aviation owns regional narrow-body and twin-aisle aircraft. The fleet is split 17% wide-body, 52% narrow-body, and 31% turboprop by value. The aircraft fleet has a 5.6-year weighted average age and a 5.7-year weighted average remaining lease term. Aviation has total assets in excess of $1.2 billion Attached to that fleet is $507 million in unearned contracted lease receivables from existing operating leases and a further $61 million in financed lease receivables. That's over $568 million in receivables and remaining leases with which to repay debt. And at that point, on average, the fleet will still be less than halfway through its life. The company has begun positioning itself for the eventual transition of the industry with aircraft using 100% sustainable aviation fuel to produce low CO2 emissions on a net basis. Low CO2 emissions will advantage airlines in terms of taxes and government regulation. The company is engaged in a number of campaigns driven by the airlines wanting to increase and renew their fleets for the delivery of new aircraft. Evasion's fleet at 30 June is dominated by fuel efficient regional and narrow body aircraft. It's these sectors that are fastest in the return to service from the pandemic. 83% of Evasion's fleet is focused on regional and domestic travel, which is close to returning to 2019 pre-COVID levels. Evasion believes newer aircraft carry a lower risk of obsolescence provide greater long-term cash flow service debt through long-term leases, and importantly, will continue to deliver improvements in emissions and sustainability in the airline sector as it moves to a carbon neutral future. Aviation holds orders for two aircraft and purchase rights for 28 ATR 72600 aircraft. This access to new aircraft represents a growth asset that has increased in value during the financial period as customer demand drives airlines to increase capacity and provides investors with a visible pathway to Evasion's future growth. Evasion has returned to a high level of operational efficiency, which simply means that a high percentage of the fleet is generating rent. Today, Evasion has four unutilised aircraft as a result of repositioning or selling 17 of the 21 aircraft that were returned from customers during the pandemic. With strong interest in the remaining aircraft, And our expectation is that we will sell or lease these remaining unutilised aircraft in the short term. Aviation has reviewed the values of aircraft in the fleet and reversed some of the impairment and increased the overall value of the fleet. The increase in valuation only represents a small recovery of the impairment taken during the pandemic. As the world continues to emerge from the pandemic, demand for aircraft is expected to continue increasing. As airline travel continues to gain strength, improvement in lease rates may lead to further increases in aircraft value in the future. The next slide shows airline customers. Today we have 17 customers in 14 countries. Baytion's customers include five flag carriers, These flag carrier airlines appear to have been more resilient as they typically receive support and continue to service domestic routes. As countries have moved beyond the peak of the pandemic, domestic travel has recovered faster than international air travel. It is important to note Avation's geographical spread of customers to the pandemic has impacted different areas at different times. Around two thirds of Avation's customers by revenue are located in Asia. with the remainder in Europe, where our largest customer, AirBaltic, has been performing well. The PAL restructuring plan became effective on 31 December 2021. Assured to the restructuring plan, PAL has retained a Boeing 777-300ER aircraft on lease from Ovation in accordance with the plan. The lease for this aircraft will continue until the original scheduled termination date. Powerless met its commitments under the restructuring agreement and continues to meet the ongoing lease terms. As we've been able to conserve the majority of our customers, fleet, team and business model through the pandemic, we believe Evasion's business is largely intact. Evasion has no and never has had any direct exposure to Russia or any Russian airline. Evasion is currently not aware of any sanctions resulting from the evasion of Ukraine that will impact the company. Innovation is a focus on new or young aircraft and therefore is a natural seller of midlife aircraft. I'll now hand over to Richard to run through the FY22 results.