Q1 2024 FTAI Aviation Ltd Earnings Call Transcript
Key Points
- FTAI Aviation Ltd reported a strong start to the year with adjusted EBITDA of $164.1 million in Q1 2024, marking a 29% increase compared to Q1 2023.
- The Aerospace Products segment performed exceptionally well, generating $70.3 million of EBITDA with a high margin of 37%.
- FTAI Aviation Ltd successfully executed a perpetual power agreement with LATAM, covering over 60 V2500 and CFM56 engines, illustrating growing acceptance of outsourcing by airlines and lessors.
- The company is confident in achieving a leasing EBITDA of $425 million for the year, excluding gains on asset sales, supported by strong demand for assets and seasonal growth expectations.
- FTAI Aviation Ltd is actively expanding its V2500 engine program, expecting to end the year with 150 to 200 engines, up from 70, indicating significant growth potential.
- Despite overall strong performance, the Leasing segment's pure EBITDA slightly decreased to $98 million in Q1 2024 from $99 million in Q4 2023.
- Gains on asset sales in the Leasing segment were slightly below expectations at $6.7 million for the quarter.
- The company noted that the ramp-up of the LATAM contract would take about two to three years, indicating a slower initial contribution to EBITDA from this deal.
- FTAI Aviation Ltd's operating cash flows were neutral for the quarter, with expectations of improvement later in the year.
- There are ongoing challenges and complexities in managing the maintenance and operations of the V2500 engines compared to CFM56, requiring continuous innovation and adaptation.
Good day, and thank you for standing by. Welcome to the FTAI Aviation first-quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today Alan Andreini, Investor Relations. Please go ahead.
Thank you, Shannon. I would like to welcome you all to the FTAI Aviation first quarter 2024 earnings call. Joining me here today are Joseph Adams, our Chief Executive Officer; Angela Nam, our Chief Financial Officer; and David Moreno our Chief Operating Officer. We have posted an investor presentation and our press release on our website, which we encourage you to download, if you have not already done so. Also, please note that this call is open to the public in listen-only mode and is being webcast.
In addition, we will be discussing some non-GAAP financial measures during the call today including EBITDA. The reconciliation of those measures to the most directly comparable
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