Aircastle's net income fell 29% in the first quarter to $23.1 million from the year-earlier period due to non-cash impairment charges of $6.2 million, higher depreciation of $5.4 million and other costs of $5.6 million.
In an earning statement today, the lessor says lease rental and finance lease revenues for the first quarter were $160.5 million, up 5% year-over-year, due to $25.9 million in aircraft acquisitions, partially offset by lower revenues from aircraft sold of $6.5 million and the effect of lease extensions, transitions and terminations of $11.2 million.
Total revenues for the first quarter were $176.2 million, an increase of $11.3 million, versus the previous year due to higher lease rental and finance lease revenues, says Aircastle.
During the first quarter, Aircastle early terminated leases on five aircraft due to "lessee financial difficulties" and recorded maintenance and other revenues totalling $14.8 million, which was partially offset by impairment charges totalling $6.2 million.
Two of these five aircraft - an Airbus A319-100 and a Boeing 767-300ER - have been classified as held for sale.
Commenting on the results, Ron Wainshal, Aircastle's chief executive officer, says: "Effective portfolio management was a major driver of our solid first quarter results, as we demonstrated both our aircraft servicing skills as well as our ability to exit end-of-life aircraft investments profitably.
"Additionally, our aircraft purchase commitments for 2013 increased to more than $450 million, and we are encouraged by the growth in our new investment pipeline. With nearly $700 million in unrestricted cash and strong operating cash flow, Aircastle is in an excellent position to pursue accretive new purchase opportunities."
Aircastle says it has "closed or committed to acquire" ten aircraft for more than $450 million in 2013. During the first quarter, the lessor closed on the purchase of one 767-300ER subject to a finance lease.
Aircraft sales and dispositions totalled $19.8 million, which resulted in a net gain on the sale of aircraft of $1.2 million.
The lessor ended the quarter with 158 aircraft with a net book value of $4.7 billion.