Dubai Aerospace Enterprise, one of the world's biggest plane leasing companies, said first-quarter profit rose by more than 48 per cent as it benefitted from an acquisition that increased the size of its fleet.
Profit before exceptional items in the three months to the end of March rose to $69.2 million, from $46.6 million a year earlier, the company said on Wednesday.
“Our first quarter 2023 financial results reflect a strong operating environment for airlines, an improving collections and credit profile, and profitable divestment activity,” said DAE chief executive Firoz Tarapore.
“We have successfully integrated the acquisition of Sky Fund I into our platform following the acquisition in the fourth quarter of 2022.”
Following the deal, DAE Capital’s fleet of owned, managed and committed aircraft, as well as those it has a mandate to manage, grew to about 500, DAE said in November.
DAE’s revenue in the first quarter rose to $315.2 million, from $298 million in the same period last year.
“Our profitability improved substantially during the quarter, and our credit quality and liquidity remained strong,” said Mr Tarapore.
“Interest rate volatility allowed us to repurchase $205 million of principal amount of our bonds during the quarter. We have increased our bond repurchase authorisation following additional repurchases in the second quarter.”
DAE's performance was boosted by air travel recovery, which, in turn, is driving up airlines' demand for aircraft. On the other hand, supply chain strains facing the aerospace industry are delaying aircraft deliveries.
Global passenger traffic rebounded to 15 per cent below its pre-pandemic levels in February, led by airlines in Asia-Pacific, which recorded the fastest growth, the International Air Transport Association said in its latest report.
Total passenger traffic worldwide increased 55.5 per cent on an annual basis in February, despite the uncertainties hanging over the global economy, Iata said.
Meanwhile, international passenger traffic rose 89.7 per cent from February 2022 and reached 77.5 per cent of February 2019 levels.
DAE reported a full-year 2022 loss after it wrote off $538 million on aircraft operating in the fleet of Russian airlines.
In November, DAE said it “has no way” to determine whether the aircraft it had leased to Russian aviation operators would be returned.
The group has insurance cover for 19 aircraft under a number of policies and it has filed “insurance claims and a litigation claim to recover amounts due under the policies”, DAE said at the time, without providing further details.
In December, DAE said it signed new deals for unsecured term financing worth $800 million to maintain its strong liquidity levels.
As of March 31, the company's available liquidity stood at $2.64 billion compared with $2.66 billion on December 31, 2022.
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Super lightweight:
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Super lightweight:
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Bantamweight:
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Featherweight:
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Middleweight:
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Lightweight:
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Welterweight:
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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