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Ann: GENERAL: AWK: Market update

  1. 					AWK
    10/02/2015 08:42
    GENERAL
    PRICE SENSITIVE
    REL: 0842 HRS Airwork Holdings Limited
    
    GENERAL: AWK: Market update
    
    10 February 2015
    
    Airwork announces continued growth with additional freighter leases and
    reaffirms guidance
    
    The company announced in October 2014 that it would expand the fleet and
    customer base in its fixed wing business to support margin improvement
    through the acquisition of further Boeing 737-400s for conversion to
    freighters.
    
    "We have received very strong demand from the market for this aircraft type
    and our innovative leasing solutions," Chief Executive Officer Chris Hart
    says. "To date we have entered into binding agreements to lease three of
    these aircraft as freighters. These leases remain subject to the completion
    of a significant passenger-to-freighter conversion and refurbishment/upgrade
    program and will commence following completion of this work. The company
    expects to complete three aircraft in the 2015 financial year (out of a total
    of seven) with the full increased earnings impact of these leases being
    recognized in the 2016 financial year.
    
    Mr Hart says the leases have been signed with well-established operators in
    Europe who contract largely to global parcel carriers and major postal
    agencies, and will continue for a minimum period of five years.  "We continue
    to see strong demand for this aircraft type, predominantly from express
    parcel delivery carriers throughout the world," he says.
    
    Committed capital expenditure for the aircraft acquisition and conversion
    programme in the 2015 financial year is expected to be $45m - $50m, which
    will be debt funded. Further conversions are subject to additional leases and
    are expected to be phased throughout the 2016 financial year.
    
    General Trading
    
    Airwork has advised the market that it remains pleased with progress. It
    continues to grow its helicopter business organically. It has added to its
    helicopter leasing fleet and its Engineering facility expansion at Ardmore is
    well under way, with completion projected for later this year.
    
    The company recognises some challenges faced by the oil and gas industry due
    to falling oil prices. The market is experiencing a slowdown in helicopter
    trading which could negatively affect the company's engineering revenues.
    However, the company could benefit from greater leasing opportunities as the
    market seeks more cost effective and less capital intensive solutions and
    could also see greater opportunities in the airline and express freight
    markets, as evidenced by the recent aircraft leases.
    
    The Board reaffirms its previous guidance of a full year net profit after tax
    of $14.5m for the financial year ending 30 June 2015.
    
    Ends
    
    For further information contact:
    Chris Hart
    Chief Executive Officer
    Ph +64 9 377 1663
    End CA:00260435 For:AWK    Type:GENERAL    Time:2015-02-10 08:42:32
    
    				

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