BOC Aviation (02588) announced its annual results for the period ending December 31, 2025. Total operating and other revenue reached $2.619 billion, representing a 2.4% year-on-year increase. Net profit was $787 million, a decrease of 14.8% compared to the previous year. Basic earnings per share stood at $1.13.

During 2025, the company sold 35 owned aircraft, up from 29 the previous year, capitalizing on strong investor demand and high aircraft values. Net gains from aircraft sales surged by 81% to $213 million. This equates to a sales profit margin of 15% for aircraft under operating lease, which is five percentage points higher than in 2024. The average age of the sold aircraft was approximately nine years, aligning with the company's strategy of maintaining a young and fuel-efficient fleet.

At the year-end, the weighted average age of the owned fleet remained at five years, with a weighted average remaining lease term of 7.8 years, positioning the portfolio among the youngest with the longest average lease terms in the industry. As of December 31, 2025, the appraised value of the company's operating lease fleet exceeded its book value by 18%, or $3.4 billion.

The company's strong operational performance was reflected in the 2% growth in total operating and other revenue to $2.6 billion. Lease rental income, the cornerstone of the company's earnings, continued to account for over 70% of total revenue in 2025. Benefiting from maintaining 100% fleet utilization throughout the year, accretive aircraft deliveries, and the timing of aircraft sales, the operating lease margin factor improved from 10.0% in 2024 to 10.3% in 2025. This enhancement in lease rates also drove the net yield from operating leases up by 30 basis points to 7.5%. Despite a concentration of new aircraft deliveries and related capital expenditures towards the year-end, the operating lease margin factor and yield in the second half remained similar to the levels seen in the first half.

Given the company's robust financial leverage and ample cash flow, the Board has decided to increase the dividend payout ratio from 35% to 40%. A final dividend of $0.3061 per share is proposed for 2025, representing the highest second-half dividend in history, bringing the total annual dividend to $0.4537 per share. This distribution reflects the Board's balanced consideration of enhancing shareholder returns while prudently managing long-term capital requirements.