Oasis Leasing flies back into the black - posts half year profit of AED 3.4M

For the first half of 2003, the company posted a net profit of AED 3.4 million, compared with the net loss of AED 8.5m for the whole of 2002.

In addition, Oasis Leasing added AED 119m to its Risk Adjusted Lease Book (RALB) - the risk adjusted present value of contracted future lease revenues. At the end of 2002 the RALB stood at AED 831m.

In the five years since its incorporation, Oasis Leasing has invested its original equity of AED 500m in assets totalling over AED 2,100m, generating AED 884m in revenue and AED 77m in profits, of which AED 40m has been returned to shareholders in dividends.

Mohammed Saif Al-Mazrouei, Oasis Leasing's Chairman, said the company had bounced back into the black despite the aviation industry experiencing one of the most difficult periods in its history. However, he said tentative signs of recovery were emerging.

"Passenger volumes are up in those geographic areas hardest hit in the recent past, such as North America and Asia, and it is apparent that recent events have not reduced the desire or willingness of people to travel for business or pleasure," said Al-Mazrouei.

"A number of the more traditional 'full service' airlines have started the painful path to reconstruction and although there will continue to be casualties along the way' what will emerge is a leaner, fitter industry capable of sustaining growth and having the ability to weather economic cycles.

"For leasing companies like us, that understand these dynamics and take a long-term view, the opportunities are plenty."

Al-Mazrouei added that the company's strategy continues to be to grow the company in a structured way, building up a portfolio of assets, and to diversify into other sectors such as shipping and infrastructure.

"We will, therefore, be looking very closely at all the options available to us to build on our success and increase the available capital during the second half of the year," he said.

Gordon Dixon, Oasis Leasing's CEO, said the company had already exceeded 2002 profit indicators, at all levels, during the first half of the year and operating and administrative costs had been tightly controlled.

"The profit of AED 3.4m compares well with the loss of AED 8.5m for the whole of 2002. But it is also worth focusing on the improved net cash flow, from operational activities, of AED 62.1m, demonstrating how our assets continue to generate revenue at the low point of the business cycle," said Dixon.

"Future prospects are very positive. Yes, the aircraft industry has its problems. But it is not all doom and gloom. For every airline failure there are many start-ups and, largely unreported, reorganisations that contribute to the ongoing growth of the industry.

"Leasing is a long-term and cyclical industry. We are at the bottom of the current cycle but there are clear signs of an upturn. New aircraft are being ordered and carriers are increasingly focusing on leasing as a means of funding fleets, rather than using their own equity or borrowing money.

"As a result we are seeing greater activity levels in a number of sectors. When we are successful in raising additional capital we will be able to move swiftly to take advantage of the available opportunities and deliver shareholder value," added Dixon.