AeroCentury, an independent aircraft leasing company, has reported a second quarter net loss of US$81,000, compared to net income of US$371,000 for the first quarter of 2018 and net income of US$356,000 for the second quarter of 2017.
In the first six months of 2018, net income decreased 76% to approximately US$236,000, from approximately US$997,000 in the first six months of 2017.
The second quarter and first six months of 2018 included US$0.6 million and US$1.6 million, respectively, of other income resulting from payments received from a lessee of three aircraft that were returned to the Company during 2017. Such payments were received after the aircraft were returned and were applied toward unpaid maintenance reserves as well as amounts owed for unsatisfied return conditions of the applicable leases. The unpaid amounts were not booked as receivables by the Company at the time of lease termination based on management’s evaluation of the creditworthiness of the lessee. Therefore, the Company is accounting for payments from this lessee as they are received and they are recorded in other income.
Average portfolio utilization was 91% during the second quarter of 2018, 90% in the first quarter of 2018, and 94% in the second quarter of 2017. The change between periods was primarily due to asset sales during late 2017 and 2018, as well as the return of several aircraft at lease end in 2017.
Total revenue and other income decreased 1% to US$7.8 million for the second quarter of 2018, compared to US$7.9 million in the preceding quarter, and decreased 4% from US$8.1 million in the second quarter a year ago.
Operating lease revenues increased 6% to US$6.8 million in the second quarter of 2018 from US$6.5 million in the preceding quarter and decreased 4% from US$7.1 million in the year-ago quarter, reflecting assets sales during 2017.
Operating lease revenues accounted for 88% of total revenues in the second quarter of 2018, compared to 82% in the first quarter of 2018 and 88% in the year-ago quarter.
The Company recorded no maintenance reserve revenue in the first or second quarters of 2018 and US$0.7 million in the second quarter of 2017.
During the second quarter of 2018, the Company recognized US$18,100 in gains from disposal of assets, compared to US$8,200 in losses in the preceding quarter and losses of US$147,700 in the second quarter of 2017.