BOC Aviation Limited Posts Record Revenues and Outlines Shareholder Returns in 2025 Annual Report

Key Financial Highlights for 2025

• Record Revenues: BOC Aviation Limited delivered record total revenues and other income exceeding US\$2.6 billion, up from US\$2.557 billion the prior year.
• Core Profit Rises: Net profit after tax came in at US\$787 million (vs. US\$924 million in 2024). However, this year’s core profit (excluding non-recurring insurance recoveries) increased 18% to US\$746 million from US\$633 million in 2024.
• Earnings & Assets: Earnings per share were US\$1.13, and net assets per share were US\$9.86. Total assets increased 5% to US\$26.3 billion, with net assets at US\$6.8 billion.
• Operating Cash Flow: Operating cash flow net of interest rose 17% to a record US\$2.2 billion, backed by a collection rate over 100% for the fourth consecutive year.
• Strong Liquidity: Liquidity at year-end stood at US\$6.9 billion, including US\$400 million in cash and US\$6.5 billion in undrawn committed credit facilities.
• New Financing: The company secured US\$4.3 billion in new debt financing, comprising US\$3.3 billion of loans and US\$1.0 billion in bonds.
• Dividend Policy & Payout: The Board recommended a final dividend of US\$0.3061 per share (subject to AGM approval), bringing total dividends for 2025 to US\$0.4537 per share, equivalent to 40% of net profit after tax.
• Gearing: Gross debt to equity and net debt to equity ratios remained stable at 2.5x, reflecting disciplined capital management.

Operational & Strategic Developments

• Fleet Modernisation: 84% of BOC Aviation’s fleet now comprises latest-technology, fuel-efficient aircraft, supporting the industry’s decarbonisation goals and enhancing operational efficiency.
• ESG Progress: The company’s MSCI ESG rating improved from A to AA, and Sustainalytics rating moved from Medium Risk to Low Risk.
• Corporate Social Responsibility: Over 3,000 volunteer hours were completed, with an 87% employee participation rate in community programs.
• Employee Investment: BOC Aviation launched its first externally-administered employee engagement survey, and continued investing in training to support productivity-focused processes and technologies.
• Credit Ratings: Credit ratings were reaffirmed at A- by both Fitch and S&P Global, underlining the company’s robust financial standing.
• Hedging & Risk Management: All non-USD borrowings (AUD and HKD) are fully hedged via cross-currency interest rate swaps. The company maintains a comprehensive risk management and internal control framework, confirmed effective and adequate by internal and external reviews.

Corporate Governance & Shareholder Matters

• Governance: The company continues to comply fully with Hong Kong and Singapore governance codes. No changes were made to its Constitution in 2025.
• Board Structure: Five standing Board Committees (Audit, Remuneration, Nomination, Risk, Strategy & Budget) ensure robust oversight. All directors received ongoing training in 2025.
• Dividend Dates: The recommended final dividend will be paid on 24 June 2026 (subject to AGM approval), with the record date set for 10 June 2026.
• Public Float: The company maintained a public float above the 25% requirement.
• Employee Incentive Scheme: The RSU Plan continues to function as the primary long-term equity incentive, with 2,465,872 shares purchased by the independent trustee in 2025 for employee awards.
• No Share Capital Changes: There was no movement in the company’s share capital during 2025. No options were issued, exercised, or outstanding.

Business Risks and Forward-Looking Statements

• Risk Factors: The company highlights ongoing geopolitical risks and macroeconomic uncertainty as key considerations for 2026. It remains vigilant but confident, underpinned by a strong orderbook, robust balance sheet, and ongoing access to diversified funding.
• No Material Legal or Regulatory Breaches: There were no material breaches of laws or regulations with significant impact on the group.
• Material Customers & Suppliers: In 2025, the largest customer accounted for 11% of revenue, and the top 5 customers combined for 34%. Boeing was the largest supplier (54% of total capital expenditure).
• Connected Transactions: All continuing connected transactions were conducted on normal commercial terms and were in compliance with the Listing Rules, and independently reviewed by the auditor.

Price-Sensitive and Shareholder-Impacting Information

• Dividend Yield and Payout Consistency: The proposed total dividend of US\$0.4537 per share (40% of NPAT) signals confidence in the company’s cash flow and earnings stability, which may positively influence valuation and share price sentiment among income-focused investors.
• Record Operating Cash Flow: Surpassing previous years, the 17% rise in operating cash flow net of interest to US\$2.2 billion underscores the company’s financial strength and ability to fund growth or higher distributions.
• Fleet Modernisation and ESG Ratings: The rapid shift to an 84% latest-generation fleet and improved ESG ratings position BOC Aviation as a leader in sustainable aviation finance, potentially attracting ESG-focused capital and boosting share valuation.
• No Material Acquisitions or Disposals: There were no significant asset acquisitions, disposals, or investments that would materially change the risk profile or asset base of the company.
• Strong Liquidity and Credit Ratings: Maintenance of A- investment grade ratings and strong liquidity are key positives for both equity and debt investors, reducing refinancing and solvency risks.
• Hedging Practices: Full hedging of non-USD borrowings limits currency risk, which is relevant for international investors concerned about FX volatility.

Summary and Outlook

BOC Aviation delivered a robust set of results for 2025, marked by record revenues, strong core profitability, and substantial operating cash flow. The company’s disciplined capital and risk management, alongside a clear focus on sustainability and fleet modernisation, underpin its resilience and growth prospects. Investors should note the consistency in dividend policy, the company’s ability to fund its orderbook with ample liquidity, and its strong standing with credit rating agencies.

While macro and geopolitical risks persist, BOC Aviation’s proactive approach to risk management, ongoing investment in the latest-technology aircraft, and demonstrated access to capital markets place it in a strong position for 2026 and beyond.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Investors should conduct their own research and consult their financial advisor before making investment decisions. The information in this article is based on BOC Aviation Limited’s 2025 Annual Report and may be subject to change without notice.

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