Amedeo Air Four Plus Share Discussion Threads

[fram7] 15/2/2024 08:47

thank you for the insight. Are you saying that the cash originally paid by investors has been wasted and there is no chance that the sale of the planes net of outstanding debt will leave much left? Its a simple matter to calculate the NPV of cash flow to estimate the share value. we know we have a nearly guarantee dividend return of about 20p/50% of current share price. but if the shares will end up at nearly 0, in case no leases are renewed and no cash is left in the company, does not look good for equity investors!

[hpcg] 14/2/2024 23:07

fram7 - for now we can say the business won't continue. Each new plane was bought with a significant chunk of equity, which the company can't really issue with the NAV and share price so far apart. Should the share price become equal to NAV, then yes, it would be possible to issue new equity if there were to be investors that wanted to do that.

[fram7] 14/2/2024 16:03

Hi, no doubt the risks are the ones you highlight. But I would say it is quite clear that the A380 will continue to flight after 2026. It is a modern, efficient, comfortable and safe plane. So I suppose leases will be renewed although we do not know the conditions. Or the planes will be sold and we have some ideas of values. I am also curious about the position of Amedeo. Are they expecting the business to close down or they will buy new planes? Not sure about this but I feel it makes sense for the company to continue if the model is financially viable. Let's remember that the share issue was done at 100 and have been for years above par. At the time of the issue terminal values of planes have been most likely overvalued but even considering returns of capital the current price seems quite low and incorporate some discounts.

[clive7878] 14/2/2024 14:15

I thought that the planes had a retrofit to increase the quality of seats to gain more income per seat. The leases I believe are up for renewal in 2026, however what is uncertain is what happens next - Are Emirates going to buy the planes and if so at what price, or will they renew the leases - again at what price and what will the dividend then be going forward?

[scrwal] 13/2/2024 12:28

So the leases expiring in 2026 are planes not having the retrofit.
Surprised that 42336 isn't currently part of the retrofit plan yet.

[davebowler] 13/2/2024 10:49

Liberum -

Amedeo Air Four Plus

Progress continues at Emirates and Thai, all six AA4 A380s to be in service by the end of Q1
Analysts: Shonil Chande and Gerald Khoo

Mkt Cap £126m | Share price 41.5p | Prem/(disc) -64.7% | Div yield 19.3%

Event

Key points from Amedeo Air Four Plus’s Q4 2023 factsheet include 1) both Emirates and Thai Airways continuing to make progress; 2) an additional AA4 A380 (MSN 208) leased to Emirates has returned to service and the final parked A380 is expected to return by the end of Q1; and 3) a lack of supply rather than a lack of demand is the issue currently.

Both Emirates and Thai made progress in Q4, with Emirates expanding operations and introducing premium economy on more routes. Thai Airways reported a profit for the first 9M of 2023 and is progressing with its rehabilitation plan, including a capital increase and debt-to-equity swap arrangements.

MSN 208 returned to service, having been parked since the start of the pandemic and MSN 201 is expected to return by the end of Q1. The utilisation of the AA4 A380s by Emirates in Q4 is shown below:

[andyandyoj] 13/2/2024 08:00

That’s a very interesting snippet

[metis20] 13/2/2024 07:30

"First, the directors were very pleased to be able to show their confidence in the Company's finances by increasing the dividend last month. Whilst there are issues surrounding values (good and bad) our cash flow is strong, we are not exposed to rising interest rates and our lessees are performing well."

"Asia Pacific traffic continues its strong recovery which helps Thai Airways. They are rumoured to be about to order new Boeing 787 aircraft. The airline is clearly confident that it will have the balance sheet and cashflow to finance them."

Interesting snippet from the fact sheet:

"Emirates has selected and the Company has formally consented for MSNs 187, 201, 206, 208, & 42334 to undergo the premium economy retrofit."

[fram7] 12/2/2024 09:33

Dear fellow Amedeo investors. Worth increasing Amedeo? We know about the uncertain future but at 42 seems quite a good deal? I feel the current price discounts a residual value of the planes quite low? Do you know why Doric shares are much higher?
I do not see much alternative in the market. Any suggestion?

[panshanger1] 12/2/2024 08:15

Took a few here last week Interesting diversification and a big fan of the A380When I think how long they kept some of those old 747s in the sky and the popularity of this plane Worth a small allocation imho

[clive7878] 08/2/2024 11:26

Up to July 2026 the AA4 shares should be on a smooth course, but the worry of the unknown factor and appears to be is when the leases expire in 2026, and what will the deal be then and what will happen then, there could be turbulence in the share price then, or they may fly higher. That is where share holders see the potential risk of the stock. That's why the stock has drifted from 47p to its current price and is flat now.

[mattjos] 06/2/2024 12:00

Boeing are really making a mess of things. Their reputation in tatters & must be having a negative impact on their business.
people actively now looking to avoid certain Boeing planes when they fly.
The A380 is head & shoulders the best long-haul plane .... Emirates will want to keep theirs flying for as long as possible.
I would not be surpirsed if even some of the 747's are brought back into service - still a terrific plane

[hpcg] 06/2/2024 11:33

The key thesis for material upside here is that Boeing fails again to deliver 777-X. We don't even know if it will reach its efficiency target. There are several A380 flyers that are totally dependent on that aircraft, most notably BA, Singapore, Lufthansa (lead customer) and Singapore. They all took 747s out of the sky during the pandemic and are running 777-300 on those routes while the routes are taken over by A350. That is without an A380 specialist coming on the line. Anyone of those might look at a lease released (refurbed) from Emirates for $50mn or more as great value for money for a 10 year life.

That Emirates will want to take our planes is beyond doubt now, what concerns us is the price.

[clive7878] 06/2/2024 10:20

Dividends should be ok until July 2026, it is just a question of what happens then.
New leases? A drop in dividends ? Where is the share price then.
I would like to think that the share price wont drift any more like of recent times,
which has wiped out the current payments.

[pogue] 05/2/2024 11:30

Not thinking it will move the share price but hopefully gives more power to AA4 when the leases are uo to get better terms.

[clive7878] 05/2/2024 11:08

pogue - I am not surprised. One should be concerned when 2 737 Max crashed and now we see another one 737 of late has lost a door in flight. Also I believe I am right in saying that one also went down in China, flying from Kunming - more than concerning as I was there a few years back. Could be good for AA4 in leasing the Rolls Royce of planes the A380's which could have a longer future.

Believe though we may not see too much movement in the share price though going forward. It has fallen from 47p to 42p wiping out the last 3 dividend payments.

[pogue] 05/2/2024 10:00

Article suggesting Emirates is not very happy with Boeing. If you were unhappy with the safety of newly ordered planes you might consider keeping the older safer ones running it could be argued....

The boss of Emirates airline has warned Boeing is in the "last chance saloon", saying he had seen a "progressive decline" in its performance.....

[clive7878] 04/2/2024 17:47

With the prediction that the Bank of England may start to cut the interest rates in the summer & it cud finished the year down from 5.25 to 4.25%, together with the fact that gas & electricity prices cud fall by 20% - pushing down inflation further - it cud make AA4 dividend yield more attractive - thus pushing up the share price.

[2wild] 03/2/2024 12:44

Taking some profits on BSIF & UKW, solar and wind farms, an reinvested my AA4 and DNA2 Dividends here at Just under 42p This week giving me a yield of 19% after costs.

With an average 5-6 year delay on new deliveries of larger Aircraft.. residual values will increase substantially for older planes, in my view.

[pogue] 22/1/2024 18:29

Paul
the increased cost of transportation avoiding the Red Sea has yet to take full effect on costs. Iran are not yet threatening the Strait of Hormoz which will have a massive impact on world oil supplies thus the cost of everything, this has already started being mentioned in news I have seen some people can see it coming soon it will happen unless Iran can avoid war with America and the UK. I am not seeing the rosey picture you see for the rest of the year.

[clive7878] 22/1/2024 16:51

The plus factor at present is the Sunak is a financial guy. What will Labour do in power - & it does look like they will be in October - when many Councils are near bankruptcy. We have to balance the books, & can't spend spend, spend.
On teletext they expect energy costs to fall by 16% in April.

[paul_butcher1999] 22/1/2024 15:06

Pogue, the underlying situation hasnt changed. Inflation is still undershooting what the BOE expected - and will be below target soon. BOE will keep delaying interest rate cuts as it is understandably embarrassed that inflation overshot before so much compared to what it thought. All that means though is that when the cuts come they will be far harder and faster than expected - as they will have left it too late (again). Too slow responding when inflation rose and now too slow when it falls. End result of all this is that by the end of this year rates will be very low again as they try to bring back a pulse in the UK economy ...

[pogue] 18/1/2024 17:54

clive
interest rates will not fall as soon as everyone had expected now that is the problem. Inflation went up a touch yesterday however the outlook has turned since the Houthis decided to stop shipping in the Red Sea. If this escalates, which it appears the US and UK want to do, then Iran may get drawn in then the Strait of Hormuz is closed and inflation takes a serious spike up. The outlook for interest rates short term is not down but remain where they are at best. Small part of my reason for selling.

[clive7878] 18/1/2024 17:44

Last time to sell to get the dividend was yesterday, Wednesday, 17th,
that's why the share price dropped today, thought that was elementary especially
more noticeable with AA4.

Hopefully tomorrow and going forward the share price should remain static, the last 2 dividends before, the share price has fallen more than the dividend being paid, but I would have thought that this should not continue. Obviously if the share price falls the true net gain is less than the 18% currently being paid.

The $64 question if one holds until July 2026 having collected a 20p dividend = 10 quarters at 2p - what is the real asset value going to be then, what is the share price going to be then, and what is the dividend going to be going forward. Mind you as inflation has fallen from 11.1 to 4%, the B of E should consider cutting interest rates - reported to be 1% lower by the end of 2024, if by the end of 2025 the B of E rate was say 3.5%, then that would make the share price even more attractive with an 18.8% dividend, as the banks would be quick to cut their interest rates payable then. But then what else in the pipeline for AA4 should increase the share price though. Much depends on the Emirates deal in July 2026.