Ladies and gentlemen, welcome to the Avation PLC Financial Year 2021 Investor Update Conference Call. My name is Natalie, and I will be your operator for today's call. If you would like to ask a question during the question and answer session on today's call, you can do so by pressing star followed by one on your telephone keypad. I will now hand you over to Duncan Scott, Avation's General Counsel. Please go ahead. Great. Thank you, good morning and good afternoon, everyone. Today, September 30, Avation published its unaudited financial results for the financial year 2021. A copy of our earnings release is available on our website at www.avation.net. This conference call is being webcast and recorded, and the webcast will be available for replay on our website. Please note that certain statements in this conference call, including answers to your questions, are forward-looking statements, including without limitation statements regarding our future operations and performance, revenues, operating expenses, other income, and expense items. These statements and any projections as to the company's future performance represent management's estimates of future results and speak only as of today, 30 September 2021. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information on the factors and risks that may affect Avation's business are included in Avation's regulatory announcements from time to time, including its annual report and half-year results announcements. Avation assumes no obligation to update any forward-looking statements or information in the light of new information or future events. Unauthorized recording of this conference call is not permitted. I will now hand over to Executive Chairman, Jeff Chatfield. Thank you, Duncan. Thank you for joining us for the report from the company for the 2021 financial year. Avation is a commercial passenger aircraft leasing company. The business has existed for 15 years, and for [14 years] of those 15 years, the business has been profitable with high growth and strong investor returns. COVID has created the most difficult year for the aircraft leasing sector, the aviation sector, and our business. The financial results reflect the difficulties of last year. The company has faced and resolved a number of threats, including significant debt disruption to the airline industry throughout the year, the failure of our biggest customer, Virgin Australia, and the necessary extension of the company's unsecured borrowings from May 2021 to October 2026. We believe that the industry is now emerging from the period of the COVID-driven destruction. Avation's strategy has been to conserve liquidity and cash flow, ensure survival, and allow focus to be directed to the maintenance of the business customers and leasing platform, which have been preserved as the impacts of the pandemic recede and air travel returns. The aircraft leasing business has thrived in part because the demand for popular aircraft has always outstripped supply, which has driven up lease rates and enabled lessors to reposition aircraft with relative ease when an airline customer fails. This aircraft shortage dynamic broke down during COVID, which left lessors vulnerable, but we are now seeing a return to the normal operating environment with an expectation of increased demand for aircraft. The presentation is in three sections. The first provides an overview of the company, the second provides some of the results, finally, we discuss the strategy we've implemented to deal with COVID over the last [13 months] before taking a look at the pathway forward, opening up the meeting for questions and answers. Slide one is a snapshot of Avation at 30 June 2021. The year ended 30 June 2021 has been the most challenging in the company's history. The COVID pandemic persisted throughout the year, disrupting airlines, aircraft leasing, and valuations. As at 30 June 2021, the company had 44 aircraft in its fleet, serving 19 different customers in 15 countries. Avation owns, manages, and leases regional narrow-body twin-aisle aircrafts. The fleet is split by 16%, 52%, and 32% by value, respectively, between twin-aisle, narrow-body, and turboprop. The aircraft fleet has a 4.8 weighted average age and a 6.4 weighted average remaining lease term. As at 30 June, fleet assets totaled $1.1 billion. Avation has $668 million in unearned contracted revenue from existing operating leases and a further $50 million in finance lease receivables. The company has maintained a full complement of commercial, legal, financial, and technical personnel to ensure it has the skill set necessary to manage the lessor platform successfully in the post-COVID-19 recovery phase. The challenges resulting from the pandemic have created a significant workload, and I would like to thank Avation's employees for their commitment, focus, and diligence during the period. The next slide displays our portfolio. Avation's diversified fleet at 30 June was comprised of 44 aircrafts, with a focus on regional and narrow-body aircraft. It is these sectors that have seen the fastest return to service as we emerge from the pandemic. 84% of Avation's fleet is focused on regional and domestic travel, which has now recovered to 85% of 2019 pre-COVID levels. During the year, Avation rescheduled its ATR order book to reduce committed capital expenditure. Avation now holds orders for only two aircraft and purchase rights for 28 ATR 72-600 aircraft, representing a material source of potential growth for the company long-term. These represent available access as the purchase rights provide a visible pathway to growth. The next delivery date for new ATR aircraft is not until October 2022. Avation believes newer aircraft carry a lower risk of obsolescence and provide greater potential long-term cash flow to service debt and long-term leases. The next slide shows customers. Today, we have 19 customers in 15 countries. Avation's customers include seven flag carriers. While flag carriers are not excluded from the impacts of COVID-19 and associated travel restrictions, these airlines are more likely to receive government support due to the national importance they carry out. These airlines typically also service domestic routes, as countries have moved beyond the peak of the pandemic, domestic travel has recovered faster than international air travel. It is important to note Avation's geographical spread of customers as the pandemic is at different stages around the world. Around two-thirds of Avation's customers by revenue are located in Asia, including airlines based in countries that had a less severe impact from the virus. We also have been fortunate in Europe, where our largest customer, airBaltic, has been performing well and has received a government equity injection. As we've been able to conserve the majority of our customers' fleet, team, and business model, we believe Avation's business is largely intact. Let me hand the call to Richard Wolanski, who will provide more detail on the financial result and key ratios. Thanks, Jeff. The next few slides in the presentation provide a summary of the financial results. Further detail is included in today's stock exchange announcement, which is also available on the company's website. On to our financial year 2021 summary. During this financial period, Avation generated total income of $120.1 million, down 12% year-on-year, with revenue of $117.7 million, down 13%. This was primarily driven by the failure of Virgin Australia, which resulted in some of the fleet being unutilized for the majority of the year. Operating loss totaled $62.7 million. This was impacted negatively and dominated by the prolonged impact of the pandemic, which has resulted in $87.4 million in impairments to the value of the fleet and $25.4 million for expected credit losses. An end to the pandemic appears to be in sight, with the rollout of global vaccination programs supporting the return to growth in passenger numbers. A return of air travel to pre-COVID-19 levels may result in an increase in the value of aircraft that could reverse some of the impairments in future periods. This resulted in a total loss after tax of $84.9 million for the year. Fleet assets declined 13% to $1.1 billion due to the impairment of the fleet, depreciation, and the disposal of four aircraft during the period. At the onset of the pandemic, the company elected to pause capital expenditure to preserve liquidity. The weighted average cost of total debt increased from 4.5% to 5.4% due to the added interest free component resulting from the senior notes extension and an increased margin on the company's warehouse facility in the second half of the year. The loss per share was [$131] per share for the year. On to the next slide, which provides an analysis of Avation's debt. During the period, Avation initiated a process to extend the date of maturity of the $322.6 million outstanding in Avation Capital S.A. senior notes from May 2021 to October 2026. The extension provides sufficient financial flexibility to support the continued stability of the business. The extension is for more than five years. The company retains the option to refinance or call the notes at any time. The extension of the maturity date and other revisions to the terms and conditions of the notes has been accounted for as a substantial modification of the terms of the debt instrument in accordance with IFRS 9. Under IFRS 9, if the modifications to terms of the debt instrument is substantial, the existing liability is extinguished and a new liability is recognized at fair value. The fair value of the notes at the date of the extension based on the quoted open market price of the notes of $0.82 on the dollar was $281 million. The total transaction costs incurred in connection with the extension amounted to $11 million and includes $3.5 million for the fair value of the share warrants issued to the holders of the notes. The difference between the extinguished liability and the new liability, less transaction costs incurred, has been recognized as a gain of $53 million in the trade for profit or loss. We mention this because that is the only way that we could account for that extension on the bond. Debt heaviness has declined by almost $114 million over the past year. There was an increase in the weighted average cost of the group's secured debt facilities to 3.9%, up from 3.6% due to an increase in the margin applied to the company's warehouse facility since December 2020. This and the increase in coupon following the extension of the duration of the notes resulted in the weighted average cost of debt to the company increasing to 5.4%, from 5% as at 30 June, which was at 30 June 2020. At year-end, 90.9% of total debt was fixed or hedged interest rates. Avation's debt-to-assets ratio is 23.9%, which reduced from the 2022 of 25.7%. The chart shows the evolution of the group's cost of debt over the past eight years. Onto the next slide, where we have provided a range of key ratios on a comparative basis. The net asset value per share is up to £1.64, compared to £1.86 as at 30 June 2020. That, we hope, will be a temporary suspension. Administrative expenses on a cash basis, excluding the warrant expense declined by $1 million or 9% over the past year, [audio distortion] cash administrative expenses in response to the virus. Debt to EBITDA has improved to 7.7 times from 8.4. Operating cash flows were impacted by the increase in pay hedges from the COVID-19 support Avation provided to its airline customers. EBITDA as a function of interest expense dropped a very small margin. The next slide provides an update on Avation's cash and liquidity position, which has been the focus of our efforts over the past year. Total cash has improved over the past year, and we have three unencumbered aircraft as at the end of the year. Loan maturities are typically aligned with lease terms, and with a long average lease duration of 6.4 years associated with the fleet, most of Avation's senior debt has significant duration. We've been successful in obtaining waivers for any of the outstanding issues as at 30 June 2021. The other 2 loans, which now have an additional interest component on top of the original 6.5% coupon, are either 2.5% PIK Is payment in kind, or 1.75% cash, have a maturity date of 31 October 2026 and are callable at any time. Avation also accessed the equity capital markets in March with a $10 million share issue, expects to sell further underutilized aircraft before the end of the year, which will also enhance liquidity further. Liquidity is expected to improve over the next [three quarters]. We've already announced the sale of an A320 that will release over $20 million in equity, we also expect to sell a majority of the six remaining ex-Virgin ATR aircraft, that combined are expected to release approximately $50 million that can be used to pay down debt and fund future growth. Add to this the significant collections in the millions of dollars from the administrations of Virgin Australia and Qantas Airlines, you see how our liquidity position will improve. This supports the return to growth that we are looking for in the coming years. I will now hand the call back to Jeff for an update on the company's COVID-19 strategy and the pathway forward for the company. Thank you, Richard. The next slide is our COVID-19 liquidity strategy. Avation's COVID-19 strategy is focused on maintaining liquidity and cash flow. Avation took a pragmatic approach as airline customers suffered from major disruptions. Avation was the first mover in working with airline customers to help them through this difficult period. Our support involved allowing deferment of a proportion of the monthly rent. This is not a rent decrease or holidays. It was a loan. The airlines need to indeed, have begun to repay the deferred rent. To balance this reduction in cash, Avation implemented three key strategies to preserve cash flow. The first has been to adjust the amortization of senior loans associated with the fleet with key lending banks. The second was to reduce cash expenses. The third step has been to reduce capital outcomes. This includes a moratorium on capital expenditures. That has seen no new deliveries of aircraft into the fleet on a trending basis, as well as a temporary suspension of dividends. There are two ATR aircraft scheduled for delivery in late 2022, and when in position with the customer, these will represent only a small equity commitment for each aircraft, given that we've paid $3.5 million in fee-free repayments for each aircraft, and expect to be able to finance most of the remainder of that position cost. By carefully managing cash flow, Avation has been able to navigate through COVID-19 to position itself for opportunities post-pandemic, and as Richard just explained, we expect our liquidity position to be quite strong. The outcome. Hope we show the outcome next slide. The next slide provides a summary of the outcome. Avation has successfully delivered on with its customers and lenders to deal with the pandemic. We entered into a range of deferral agreements with 14 of our 19 customers. Airlines were required to pay maintenance reserves as part of deferral agreements. The total rent deferred by airlines is $25.9 million. Avation has successfully mitigated the impact of lower rents on cash flow by agreeing to reschedule $35.2 million in loan amortization. One of Avation's most important achievements during the year was the extension of the maturity date of the $342 million outstanding notes from May 2021 to October 2026. This extension provides stability to the company's capital structure and will assist the company in successfully navigating the remainder of the COVID-19 pandemic. Avation lowered its cash administration expenses by 9% compared with the year-end, 30th June 2020. In terms of customers, next slide. Air travel is continuing to recover towards levels that existed prior to the pandemic. According to OAG's monthly passenger traffic, for July 2021, domestic travel is now at 84%, and international travel is at 26% of pre-COVID-19 levels. International travel is expected to increase over the next six months as companies adopt vaccine and testing requirements for their inbound travelers. Notably, this regime has recently been adopted by the U.S., [U.K., and the EU travellers], which will open up some of the busiest international air routes. With many Western Asia countries now approaching or exceeding 70% vaccination rates, there is an expectation of an opening up of major European, U.S., and Australasian routes in the coming months. 13 of our 90 customers are being charged normal rents at this time. Three of our airline customers have entered into formal or informal restructuring processes as a result of the pandemic, including Virgin Australia, Philippine Airlines, and Braathens. Braathens has now completed its administration process and survives as a customer. In relation to Virgin Australia, Avation had 13 aircraft returned and has successfully reconditioned seven of these aircraft over the past year during the worst of the pandemic, either by selling them or entering into new leases with new customers. Avation has reduced debt associated with the remaining six aircraft, which was around $30 million at the time of Virgin Australia, to just $6 million today. Avation expects to sell or lease most of the remaining six aircraft by the end of this calendar year. This will boost Avation's cash position and improve operational efficiency, especially all of the fleet will then be income producing. In addition, we expect to receive a payout from the creditors' trust of a minimum of $9.5 million in early 2022. At this point, the Virgin administration will almost be fully resolved. The third airline is Philippine Airlines, which filed part of the voluntary additional relief under Chapter 11 in the United States in order to complete a pre-arranged restructuring process. Avation and PAL have agreed terms for PAL to retain the use of the Boeing 737-800 on lease from Avation. Going forward, a successful restructuring will ensure that Avation will commence collecting rent on the aircraft for the first time since early 2020. Under the restructuring, Avation will also be able to receive payments relating to utilization since the 1st of September 2020 on a power by the hour basis, along with temporary notes for proportion of rent outstanding for the period prior to 1st of September. The aircraft will revert to fixed rate lease for the remainder of the duration of the lease from March 2022. These three airlines, through restructuring arrangements, make up a majority of the impairment and credit losses recognized in the profit and loss for the year ended 30th June 2021. Conclusion. In conclusion, Avation continues to navigate its way through the most challenging period in its history, as well as the history of aircraft leasing. We believe we're through the worst of the impact from the pandemic. The disruption created by COVID-19 is expected to recede following the completion of global vaccination programs that support a return to increased levels of air travel. This trend is already evidenced in regional and domestic travel, and we expect to be followed by a recovery in international travel as we move through the remainder of the 2022 financial year. The fundamentals of the business model remain intact. The recent Chapter 11 filing for the voluntary restructuring by Philippine Airlines should lead to a resolution of one of the last remaining lease defaults resulting from the pandemic. Avation is set to emerge from the pandemic with a slightly smaller fleet, with higher levels of utilization and a long-term frame for repayment of the company's unsecured notes following the extension of their maturity to October 2026. Avation's cash and liquidity position is expected to improve in the coming months through the expected sale of underutilized aircraft, the receipt of distributions from creditors from Virgin Australia as well as Philippine Airlines. This will have the combined impact of improving operational efficiency and increasing liquidity, which can then be used to pay down debt and fund the fleet growth planned for late 2022. The company believes that airlines will require a significant number of leased aircraft in the post-pandemic phase due to the large number of older aircraft that have been retired and the impact of the pandemic on airline balance sheets, reducing their ability to finance the purchase of aircraft directly. As a result of the pandemic-related financial turmoil, there's likely to be opportunities to buy aircraft from airlines and lessors looking to adjust or reduce their portfolios, which Avation is positioning itself to take advantage of. Avation is optimistic about the long-term opportunities for airline travel, particularly in the regional and narrow-body aircraft sectors. We recently completed a small share placement earlier this year, which the directors and senior management, including myself, subscribed to 10% of the placing. We continue to support, believe in, and align with the company and its investors. I'll now commence the Q&A session. Ladies and gentlemen, if you wish to ask a question, please press star followed by one on your telephone keypad. If you change your mind and wish to remove your question, please press star followed by two. When preparing to ask your question, please ensure that your phone is unmuted locally. To confirm, press star followed by one to ask a question. One moment for the first question, please. First question is from the line of [John Cummins] from WH Ireland. Please go ahead. Good afternoon, gentlemen. Just a couple from me, if I may. Firstly, just as far as you said that, obviously, you may have the potential to reverse those impairments if aircraft values do increase. Can I just clarify that? At this point in time and what you see, you don't see any requirements at all for any further impairments across the fleet assets? I'll answer that question. No, not at the moment. We believe that aircraft valuations are actually going up, as evidenced by the transaction that we're completing at the moment, and we're confident that we've done enough impairments for the moment. We don't see any more right now. Thank you, [Jeff]. Another one, follow on for yourself, probably. At what point do you think you'll feel comfortable with acquiring, making further aircraft acquisitions? If there are any particular aircraft categories, types, that you think are providing very good value as you see the market at this point in time? Thank you. That's a good question. The answer is, we've had a sort of a global experiment on what types of aircraft are valuable and recommend the quickest. It's quite interesting in the sense that regional and narrow-body, short duration aircraft or aircraft with a short mission, seem to be recovering the fastest. Well, they are. Statistically, they are. Things like the A220, the Airbus A220 aircraft, are increasing in value and very popular, and we can sell them all day. The ATR is also going well. We've demonstrated we can deal in a lot of ATRs in a short time, which is great. The answer to your question is, it's the financial calculation. The opportunity to acquire aircraft, when it presents itself with the right returns, provided that they're profitable and will make us money over the long term, is what we're looking for. We're confident we've demonstrated a great ability to trade aircraft in our 15-year history. We're confident that that will continue. It's profitability, and we'll drive it. Thank you very much. The next question is from the line of Ross Harvey from [Davy]. Please go ahead. Hi, Jeff. Hi, everyone. Two questions from me. First one's on the ATRs, and just in regards to the two that are delivering next year, you might make a comment on how the progress is going there on that marketing front, whether that's been unplaced or are you for target. Just in regards to the options, what your thoughts are on those, on potentially selling those. I've got a second question to follow, but I might just ask that first. Well, I'll take part of that. We see demand for the ATR aircraft around the world, and it's the situation that one of our competitors or the major competitor in that sector, has some financial difficulties. Clearly, we've got a pretty strong opportunity in the sector, and there certainly will be demand, without question. We're seeing it now. We wouldn't be able to sell all those aircraft that we've sold and replace them, were that not the case. And in regards to the. Until the end of next year, you have plenty of time to place them. In regards to those purchase rights, Jeff, what's the latest thoughts on those, keeping them, executing them, or selling them? It's a good pathway to growth. The regional travel sector has statistically rebounded the fastest, and there's plenty of demand developing, and consequently, the competitor, the Q400s, are not made anymore. There's certainly going to be lots of demand for those aircraft in the coming years, and it is a long way down the track in terms of time. We've got plenty of time to decide. There's no decision yet on phasing or selling, but I think it's likely that we'll phase them. Yeah. Perfect. One that might be more for Ian and Richard then is just on the cash collection side. I know you updated us on that metric earlier in the year. I think it was 71% in Q1, in the mid-sixties in the second half of last year. Can you give any updates on where that may have been in Q2 and into Q3? I think Ian's got two answers to that question. Got you. Ian, team calls for you both. Okay, cool. Yeah. Hi, Ross. The average over the year is just over 70%. It's kind of fairly consistent with earlier in the year. Obviously, we anticipate that will improve quite dramatically in the coming year as we put aircraft back onto leases. Also take collections of arrears that have built up with some of the airlines. In theory, that ratio should be about 100%, if we execute on our plans. That's great. Just on that, obviously, with the PAL situation and PAL recommencing the payment of rent, cash collections will increase dramatically. Yeah. That'll help. One separate one, perhaps more again for Ian. On the leverage front, I'm just wondering, is there a certain target that you have in mind for kind of steady-state leverage moving forward post-pandemic? I mean, clearly, it'll take some time before the air traffic systems back up and running and cash collections coming in where you'd like. Have you got a figure in mind where you'd like to reach a certain leverage level before you reinitiate growth in the business? Are all these kind of moving parts that you don't really think about in kind of numbered terms that you're targeting? Well, we need to get the credit rating up, which requires a reduction in leverage, which probably requires growth. I don't know that you can shrink too much, and get your credit rating up enough to lower the cost of funds. I think growth will be important. I'm sorry, Ian, I cut you off. Apologies. You can jump in. No, that's quite all right. I think you've answered the question. Okay, great. One final one, if I can. I know I'm going to hog the line here for a bit, but just on the impairment side. Just wondering, is there a kind of proportion of the figure this year that could have been related to the restructuring and perhaps a percentage that would have been related to just your generic value assumptions or just one versus the other? Any commentary would be helpful on that. Thanks. That's a question for Ian. Hi, Ross. The biggest single impairment was on the 777 that was on lease to or is on lease to Philippine Airlines. That takes up about a third of the overall balance. In the ex-Virgin ATRs, there's about another 32% of the total. Those are the two major components of the impairment charge this year. There's obviously general softening in residual values because of COVID, and that's kind of been across the board. That kind of makes up the balance. Yes. Thanks, Ian. Thanks for that. Thank you. The next question is from the line of Brian Charles from R.W. Pressprich. Please go ahead. Hi, good morning. Congratulations on navigating a very difficult environment in terms of cash flow and liquidity. In terms of market outlook, I want to make sure, am I reading something correctly on the income statement? You have purchase rights for a $150,000 charge for the full year, but I think that's coming off of a $7.9 million charge for the first six months. Was that $7.9 largely offset in the second six months in terms of the reversal of the charge of those valuation rates? That's a question for Ian. Yeah. Hi, Brian. Yeah, when we rescheduled our supply contract with ATR, we gained an additional three purchase rights. When you're looking at December, we had [25 purchase rights], and that number is now [28 purchase rights]. rights]. That accounts for part of the reversal of that $7 million reduction that we saw in the half year accounts. The other factor is that we also adjusted the pricing of the contract with ATR when we rescheduled the order, and that has had an impact as well. Brian, our pricing with ATR improved, which means over time, those purchase rights or options will actually improve significantly in value because this is a very cheap aircraft, and which would make us keen to exercise them. We will be the largest lessor customer that ATR has, I believe. Which will be a good position to be in a recovering market. Fair enough. It sounds like a good step to navigate a difficult environment, take advantage of lower aircraft prices. Yeah. Okay. Thank you. Away from that, I don't know, do you have any color or anything you can tell us about in terms of maybe upcoming lease maturities? I know you have something coming up with Air France. We have an upcoming maturity with Air France. We don't like to announce LOIs, we've actually signed, placed that aircraft today with an LOI with another airline. That will transition to another airline. We may need to make an announcement on that in due course. We don't normally announce LOIs, since you've asked the question, that's the situation. That plane won't be stored for any material amount of time. It's transitioned. Okay. Thank you for that. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star, followed by one on your touchtone telephone. The next question is from the line of James Chin from Caravel Asset Management. Please go ahead. Hi. Thank you for taking my question. As a follow-on to. I'm sorry, I can't hear. Can you try that again? Yeah. Email the question? I think that's better. Is this better? Yeah. I just wanted to get an update on near-term lease maturities, beyond the one with Air France, the two ATRs with Loganair, and the 737 with Garuda. First question. Well. Yeah. Yeah. Well, the Air France one, as I've just announced, has been transitioned to another airline. The Garuda aircraft we are repossessing because Garuda look like going through a restructuring, and we're not particularly happy with that. We're taking the aircraft back and we'll place it or sell it, but we'll probably place it somewhere. That's not really a problem for us because it's an unencumbered aircraft, and it's only one with that credit. The two Loganairs will be transitioned to other airlines when we market them. That won't be a long-term problem. In reality, our inventory level is not that high. What was your second question? Do you have any updates on re-leasing the six ex-Virgin Australia ATRs? I think Rob would like to answer this question. Hello. Yeah, we actually had 11 in total ATRs from Virgin, of which we've also signed an LOI for three of those. We have placed, we sold one, and we've placed another three. We only have three ex-Virgin ATRs placed actually. Great. One more, if I may. Have you begun receiving cash-based revenue from the power by the hour since it was mentioned earlier? I missed it. I'll answer that one. Not yet. It's soon to be. It's agreed, so the process has started, but it's not yet. We will soon. Thank you, Jeff Chatfield. Thank you. I appreciate it. There are no further questions at this time. I hand back to Jeff Chatfield for closing comments. Thank you very much for your time today or this morning or this afternoon, depending on where you are. Clearly, it's a difficult year, and the company is well-placed to grow again in the future and navigate its way through the COVID situation. We've taken down impairments. We've managed the business, and it's all been about survival. Thank you very much for your time and support. If you've got any questions, please contact us at any time. Thank you.