Q2 2022 AerCap Holdings NV Earnings Call
Good day, and welcome to Aercap second quarter 2022 financial results.
Today's conference is being recorded any transcript will be available following the call on the company's website.
At this time I would like to turn the conference over to Joseph Mcginley head of Investor Relations. Please go ahead Sir.
Thank you operator, and Hello, everyone welcome to our second quarter 2022 Conference call with me today is our Chief Executive Officer, Angus Kelly, and our Chief Financial Officer Pete.
Before we begin today's call I would like to remind you that some statements made during this conference call, which are not historical facts may be forward looking statements.
Forward looking statements involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements.
A couple of undertakes no obligation other than that imposed by law to publicly update or revise any forward looking statements to reflect future events information or circumstances that arise after this call.
Further information concerning issues that could materially affect performance can be found in aircrafts earnings release dated August 11 2022.
A copy of our earnings release and conference call presentation are available on our website at Aercap com.
This call is open to the public and is being webcast simultaneously at Aercap com and will be archived for replay.
Shortly run through our earnings presentation, and we'll allow time at the end for Q&A.
As a reminder, I would ask that analysts limit themselves to one question and one follow up.
Turn the call over to Angus Kelly.
Thank you for joining us for our second quarter 2022 earnings call I am pleased to report another quarter of strong earnings and profitability for Aercap.
During the second quarter, we generated $1 91 of adjusted earnings per share and adjusted net income.
$464 million as we continue to capitalize on the increasing global demand for aircraft.
It is of course, aercap platform and its people that underpins our success.
During the quarter the Aercap team executed 184 transactions with.
This included 125 long term lease agreements 16 purchases at 43 sales.
This was a tremendous achievement and gives us and our parallel level of information.
About both global and regional supply and demand.
This unrivaled knowledge combined with the skill set and know how of our new colleagues keeps aercap in its market leading position.
Global passenger traffic continues to increase with approximately 75000 daily flights taking place in the four major regions at the beginning of August .
This is up nearly 20% are 12000 flights per day in the last three months alone.
As you will see from slide four this increase was driven by China predominantly.
Which grew by approximately 7000 daily flights in that period of time.
As a result of the loosening of quarantine restrictions.
China is currently taking its biggest steps towards loosening COVID-19 controls since the pandemic began.
We have seen a relaxation on quarantine lands and PCR testing requirements.
Encouragingly, the U S and Europe and the rest of Asia have also continued to make progress despite numerous issues around stocking for airlines and airports in many parts of the world.
Ryanair as one example through 90% more passengers in the second quarter of 2022.
Versus the second quarter of 2019.
Many airlines have underestimated the underlying strength of travel demand, having overcorrected on the way down and are now playing catch up.
This again demonstrates how much people want and need to travel.
Domestic travel continues to lead the way with international travel is still lagging somewhat behind.
This too is improving.
As you can see from slide five.
190 countries, where we track travel patterns 103 of them have now surpassed 80% of 2019 total traffic.
With a particular acceleration from February of this year.
Furthermore, the number of countries, which have already surpassed 2019 traffic levels has more than doubled since the start of the year to 25.
This shows that the recovery is truly global in nature.
I firmly believe that as borders fully reopen we will see the same rebounded international travel that we saw in the domestic markets.
Given the level of inquiry and demand we are seeing for wide body aircraft.
It is clear that the airlines are also convinced of this.
To this end we added a further five Boeing 787 orders at the Farnborough Air show, which will deliver in 2024.
This takes our total 780 sevens to 125 of which 99 have already delivered.
Following the positive developments between the FAA and Boeing regarding the resumption of 787 deliveries, we expect to receive one 787 this year.
Of course, we would not have placed orders for further equipment.
We were confident that falling with salt certification issues on the 787.
And that the aircraft will form the backbone of the long haul market for many years to come.
We fully expect that when international travel to China is permitted to fully reopen there will be a massive surge in demand, which will further bolster both wide body and narrow body aircraft demand.
We saw this a few months ago on the Trans Atlantic markers, where the United States remove the Colbert entry test requirements and bookings were reported to be off the charts. According to United CEO .
This strong demand for long haul travel was also confirmed by Lufthansa last week when they reported that their bookings are strong through the end of the year.
Moving on to supply.
As I referenced last quarter, there are approximately 2000 fewer aircraft flying today.
<unk> to the Oems expectations in 2018.
Which is more than a whole year's narrow body production.
This is due to a number of factors.
Building supply chain disruption certification and production issues as well as staffing problems, none of which are likely to be resolved quickly.
It is clear to me that many airlines share this view.
Is manifesting itself in greater demand for lease extensions and feeding into higher lease rates.
The supply chain disruptions are challenging the Oems to find the balance between supporting the in service fleet of aircraft.
Those aircraft already delivered to airline customers.
New equipment deliveries.
For example, there was a shortage of spare engines at the moment as a result of increasing aircraft production rates.
New technology maturation issues and labor related supply of spare parts.
This means airlines with aircraft on the ground are requesting spare engines to be diverted for new aircraft deliveries.
Thereby limiting new aircraft delivery rates from Boeing and Airbus.
The engine manufacturers are working through demand scenarios to appropriately allocate their limited supply chain resources.
Firstly to support the in service fleet of aircraft.
And secondly to meet their production obligations to Boeing and Airbus.
Airbus recently delayed their plans to get to a monthly production rates of 65 on the <unk> hundred 20 Neo family to early 2024 from mid 2023.
But even that seems somewhat optimistic given all of that is going on.
Likewise as I referenced earlier.
<unk> Hasnt delivered a 787 for 21 months and.
They are also being held back by the engine manufacturers from increasing their 737 Max deliveries beyond their current 31 a month Reis.
So what the airlines do in the meantime.
Turning to the leasing companies with delivery certainty is higher as we are closer in time delivery slots or we provide already built aircrafts.
You will have seen from the Farnborough Air show a few weeks ago that the level of orders was relatively muted.
This is not from lack of demand rather lack of availability.
As a result lease rates are going up and demand for used aircraft is robust.
Aercap spare engine leasing business.
Is well positioned to support both our airline and OEM customers in this climate of new technology maturation.
<unk> chain constraints and post Covid cash management at the Airlines.
Aercap has the largest spare engine leasing portfolio in the world.
Which positions us well to capitalize on both current and future engine shortages.
Cargo airlines, especially wide body phrase operators continue to achieve unprecedented high returns as the legacy of the pandemic induced capacity shortages.
We expect this level of cargo demand to be sustained.
Although macroeconomic factors have the potential to temper the rate of growth we've seen in recent years.
Singapore Airlines is one example spoke about the recovery in cargo demand it has seen from Asia and.
I would expect yields to remain higher than pre COVID-19 levels in the near to medium term.
As air cargo capacity remains tight on key trade lanes to and from Asia, particularly between Europe and Asia.
We are virtually fully placed on our original firm order of 'twenty Triple seven 300 EUR failures.
And we are also seeing strong demand on the narrow body freighters side.
We recently announced a number of deals for the long term lease of 737 800 patients to goal in Brazil, who will operate them on behalf of Mercado Libre, a $50 billion E Commerce business in South America as one example.
On the helicopter side, we continue to see positive momentum with leasing activity improving across all sectors.
There is clear demand from operators to lock in contracts earlier.
The supply picture continues to tighten.
This is being driven by strong demand from oil and gas.
High renewal rates and helicopter emergency medical services.
And of course limited production from the Oems.
Given aercap market, leading position in the global helicopter business, we've been able to take advantage of these trends and drive our returns higher.
So in summary, this was another very solid quarter for Aercap with earnings and cash flows remaining strong throughout the business.
The market environment continues to improve.
And as the market leader, we are well placed to capitalize on the strong demand for both new and used aircraft and engines.
Our balance sheet continues to Delever and we continue to maintain a strong liquidity position.
Despite the impact of Covid, and Russia, and the business continues to generate strong and consistent earnings and cash flows for our investors.
With that I will hand, the call over to Pete for detailed review of our financial performance. Thank you all.
Thanks, Scott good morning, everyone.
Overall this was a strong quarter for aircraft, we continue to see an expansion of the global travel recovery as traffic is picking up in more regions around the world. We're also seeing high utilization of aircraft that are on power by the hour arrangements. These factors along with supply constraints that continue to affect the Oems are contributing to higher demand.
For leased aircraft and improving lease rates.
We're also seeing very good performance from our new business areas, including engines cargo and helicopters.
The strong earnings and cash flows this quarter and deleveraging faster than we had expected.
For the second quarter, our adjusted net income was $464 million or $1 91 per share.
The impact of purchase accounting adjustments, which include lease premium amortization and maintenance rights amortization in the second quarter was $132 million, including a reduction to revenue of $105 million an increase in leasing expenses of $27 million. We also had transaction and integration related expenses.
$9 million for the quarter.
Taking all those into account our GAAP net income for the quarter was $340 million or $1 40 per share.
I'll spend a few minutes going through the main drivers that affected our results for the second quarter base.
Basic lease rents for $1 billion to $462 million for the quarter.
Once again, we saw strong cash collections. This quarter. However, overall basic lease rents were down given the loss of revenues from the aircraft and engines that were previously on lease to Russian Airlines.
We continue to see positive momentum with our customers from the global recovery in air travel.
During the quarter, our cash collections rate exceeded 100% because in addition to the regular rent and maintenance payments for the quarter. We also received repayments of deferral balances our deferral notes receivable balance decreased by $38 million to $538 million as of June 30.
And that was a continuation of a trend that we've seen over the past several quarters of these balances coming down.
Our basic lease rents also reflect $52 million of lease premium amortization during the second quarter.
As I've mentioned previously the lease premium asset is amortized over the remaining term of the lease and reduces basic lease rents.
Maintenance revenues for the quarter were $103 million and that reflects $53 million of maintenance rights assets that were amortized to revenue during the quarter.
In other words maintenance revenues would have been $53 million higher or $156 million without this amortization.
Net gain on sale of assets was $35 million for the second quarter. During the quarter. We sold 20 of our owned aircraft five of our own to engines and four helicopters for a total of $386 million. So that represents a gain on sale margin of approximately 10% for the quarter.
Other income was $71 million for the quarter, which included $39 million of proceeds from unsecured claims.
This represents the final portion of our Latam Airlines claim that we monetized during the quarter.
As we discussed previously we agreed on the sale of our other 10 claim last year that the final portion of the sale didn't close until the second quarter. When the claim was approved by the bankruptcy court.
Our leasing expenses were $193 million during the quarter, including $27 million of purchase accounting amortization expenses.
So when you add the $52 million of lease premium amortization to $53 million of maintenance rights amortization to revenue and the 27 million of amortization running through leasing expenses, you got to the total of $132 million or purchase accounting adjustments that I mentioned on the previous slide that's $105 million.
That affected revenue during the quarter and $27 million that affected leasing expenses.
Equity in net earnings of investments under the equity method was $33 million for the second quarter and this was mainly driven by strong earnings from Shannon engine support our joint venture with Safran, which is our largest equity investment SCS has been generating strong performance driven by many of the same factors that had been affected.
Our wholly owned engine leasing business.
We continue to maintain a strong liquidity position as of June 30, our total sources of liquidity were approximately $17 billion, which resulted in the next 12 months sources to uses coverage ratio of two one times, that's well above our current target of one five times and gives us excess cash coverage of.
Approximately $9 billion.
We ended the second quarter with a leverage ratio of two eight to one which is down from two nine to one last quarter and that's a result of strong earnings and cash generation during the quarter.
Total operating cash flow was $1 $2 billion for the quarter were $2 $5 billion for the first half of the year.
Our secured debt to total asset ratio was approximately 15% the same as last quarter and our average cost of debt for the second quarter was 3% also the same as last quarter.
In June .
Fitch revised its rating outlook for Aercap to positive, which is a positive development for US we continue to target mid triple B ratings from all three rating agencies and we're encouraged by this move as well as from some of the positive commentary we've heard recently from Moody's.
So overall strong quarter in terms of earnings cash flows and deleveraging and we remain confident in our ability to achieve our EPS guidance for the year.
With that operator, we can open up the call for Q&A.
Thank you and if you would like to ask a question. Please signal by pressing star one on your telephone keypad.
If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
Once again, everyone to ask a question simply press star one on your telephone keypad.
And our first question will come from Mark Devries with Barclays. Please go ahead.
Yes. Thank you so.
You've got about $6 billion of contracted Capex over the next two years, how should we think about uses of capital and also your guided.
<unk> 2 billion of annual sales.
The OEM delays continue to affect you.
I think we've always been very careful stewards of shareholders' capital.
And if we do see delays, which I think there will be some delays of course and the business continues to perform on the track that it's on which we're very confident in and.
Then that will open up.
There are opportunities for the business and we'll deploy that capital in the what we believe is in the best long term interests of our shareholders.
Okay Fair enough and then I think a lot of us expected given some of the new balance sheet constraints a lot of the airlines exited this pandemic with it that we'd see an increase in kind of their propensity to lease versus finance their fleet themselves.
Have you been observing the sharing some of the conversations you've been having with.
With your clients around that.
There is no question that leasing is growing much faster than I had expected before the pandemic.
The OEM is between sale leasebacks and direct lessor orders, we're probably looking at 65% of all deliveries will end up in the leasing channels. So.
The airlines are seeing the benefits of leasing through the pandemic because in the pandemic you know if you own the aircraft that was it you had it you were stuck with it forever and I think there'll be come to appreciate the benefits of the flexibility that leasing.
Brings more and more airlines and so you know I at one point I did not believe that leasing would surpass 50%.
The global market, we're way past that now in terms of value.
And it's only going one way.
Okay, great. Thank you.
Alright, and our next question will come from Moshe Orenbuch with Credit Suisse. Please go ahead.
Great Gus you mentioned that.
It increased narrow body demand in.
Ongoing and expected to increase wide body demand, resulting in the supply constraints, resulting in kind of lease extensions and higher lease rates could you talk a little bit about how you.
You're going to see that we're going to see that in the results at aercap over the coming quarters.
Well look I think you're going to see us over the medium to long term medium term and you'll see the short term to aircraft sales of course, but as we place an airplane today. It goes on lease let's say, it's up 30000, a month from where it was couple of years ago, you will see that extra incremental revenue fall through the P&L.
The airplane goes on lease and then every month thereafter, but at what repriced as this was subject to repricing. So stuff that we're leasing today are stuff that we're putting off putting on on a forward order book as well.
But fundamentally it's also reflected in there.
And the value of the assets too.
Alright.
Pete.
Clearly.
Looks like this quarter seems to be significantly higher than if you took the remainder of your guidance for 2022 and divided it by three certainly seems to be well above that.
I know that you mentioned that the claims.
That you from Latam that were in the revenue.
Without cause.
Because it looked like you also had expenses that were lower than at least we were looking for so can you kind of talk about how to think about your guidance for the year and the level.
If your major kind of expense items as we go forward.
Sure Moshe so.
So we feel very confident about our guidance for the rest of the year.
As you mentioned there were some one time items like the Latam proceeds that we got this quarter first quarter, we had that mark to market of $36 million right on the on the caps. So we did have some of those things affecting it.
And I think if you look at the leasing expenses those were a little lower because we had some maintenance events that we would expect it to happen in the second quarter that now are really pushed out to the third and that doesn't have a big impact on the on.
On the adjusted numbers, but it doesn't gaps so I think it's more pronounced there and thats. Another reason why we think it makes much more sensitive focus on adjusted because you don't have those you just have less in the way of quarterly swings than you do on GAAP because of purchase accounting things less volatility.
Okay. Thank you.
Alright, and moving on we'll take our next question from Ross Harvey with David. Please go ahead.
Hi, Thanks, guys for taking my question.
I've got two so the first one is in relation to the Shannon engine support seems to have driven a pretty strong income from associates. In Q2, just wondering is that a fair recurring figure just given it was Q4 and Q1.
And secondly, I will just give my second question in terms of secondary markets.
It seems very positive just based on the gain on sale of the asset disposals through Q2. The margin you achieved starts or any qualifications, you would give and with docs type of backdrop tempt you into launching a larger sales program.
As was done post ILS eight thanks.
Well, maybe I'll take the first one Ross.
So for US, yes, you're right. It was higher this quarter is $33 million contribution first quarter. It was a very low contribution basically because they had some impairments that they took as a result of Russia. So that's why you really didn't see a contribution in the first quarter.
I think that this is closer to a run rate there it might be have been a little high this quarter because there was some catch up there, but I think youre looking more or about 25 is what I would say a quarter.
And on the sales yeah, you're right, we did achieve healthy margins.
And.
Certainly as we look forward, we see the sales market as being robust.
No surprise that in April may of this quarter following the Russian invasion of Ukraine, There was a pause on buyers coming into the market, but that's changed dramatically now and yeah. We have a good few assets in the pipeline already for the second half.
Great. Thanks for the time.
Sure.
Alright, and our next question will come from Hillary <unk> with Deutsche Bank. Please go ahead.
Hi, Thank you for taking my question I just wanted to ask you about the 35 million dollar gain on sale last quarter, you mentioned that legacy Ucas aircraft.
From chapter to be thawed, cryo could be acquisition, while already mark to market and therefore, there were no gains recorded on those assets.
Any of those any of those legacy assets.
So this quarter and.
Expecting that going forward as well.
So.
I'm thinking maybe not but.
On that.
Actually Hilary we did have a couple of those this quarter. So it would have been a higher gain on sale number. It was about it was two two assets. So the gain on sale would have been several million dollars higher if you. If you didn't have that purchase accounting impact and we will see some of that through the rest of the year, but I think what this highlighted really this quarter is.
You still had a high margin, even even taking that into account.
Got it and then just wanted to ask about you know our helicopter business. Obviously, there is a positive momentum supporting that business.
Just wanted to find out.
On the top line so that business are you planning to maybe.
So some of this asset.
Vantage and the strong demand in the market right now or.
Well, thank you guys.
And also yes, that's about it. Thank you and does it look like the thing you have to think about.
Yeah.
Thank you.
Hum.
Helicopter business to answer your question look it's going well, we're happy with the business clearly we've seen an improvement in the demand for heavy captors.
Not just oil and gas it's outside of that as well and emergency services that we do a lot of work into.
Yeah.
Okay, and Hillary any other questions.
Thank you very much it was very helpful.
Alright, and we'll move on to Helane Becker with Cowen. Please go ahead.
Thanks, very much operator, hi, everybody. Thanks for the time.
You had a chance to look at then pending tax.
Ranges in the U S and would that impact your propensity to acquire shares when the time comes.
So we're looking at the at the new legislation.
But no I don't think that that's going to affect that.
We're looking at it more broadly in terms of what the implications could be I mean, I think overall and I think we've talked about this before you know the movement towards the global minimum tax is likely to take our tax rates up a little bit in the future towards the where now we estimate 14% for the year and would that go up a couple percent.
[noise] points, a couple of years down the road I think it probably would but that's really what we're thinking the impact would be.
Of all of this if I think of.
Of all of the OECD countries broadly that's probably the impact that we're looking at.
We have to obviously, there should be some discount on that as well given the.
Will it get through Congress to get all that Don as well at the moment I'm not so sure that we'll see that global minimum tax rate any time soon.
Got you. Okay. That's helpful. Thank you and then have you thought differently about leasing into China.
And is there how are you thinking about that market going forward given the issues that exist in Russia.
I think China's a very different market to Russia to be fair.
You got to realize that China makes up almost 25% of everything Boeing and Airbus Sal.
And we've had a great relationship with China with the airlines there and so it doesn't represent a fourth anywhere near 25% of our book.
But the Chinese airlines have been great partners of ours for a long time.
That's very helpful. Thank you very much.
Sure.
Alright up next we'll hear from Jamie Baker with Jpmorgan. Please go ahead.
Alright. Thanks, operator, this is James on for Jamie and Mark.
I think you already mentioned it in your prepared remarks, but just wondering if your view on ordering speculative aircrafts has changed at all given the ongoing shortages.
You mentioned strong cargo demand and international recovery, so, particularly with the wide bodies.
You changed there.
Buying aircrafts.
Could you just you just broke up at the start with the question.
Oh I'm, sorry can you hear me now.
Yes.
I was just asking on your view on ordering speculative aircrafts has that changed at all just given the strong cargo to Maggie mentioned in international recovery.
I think the thing about buying airplanes is buying the right airplane at the right time if.
If you look at Aercap history of buying ordering airplanes, the last major order Boeing or Airbus got at the very beginning of the pandemic. Most from Aercap, we had an option to exercise on 50, <unk> hundred 20, Neo nobody was buying airplanes.
That's the time to buy.
If youre going to queue up outside the tent at the Air show with every other cloud and keep ordering airplanes, then youre going to overpay youre going to get power delivery positions, you're going to order airplanes, five or six years away from weight from the delivery days escalation with Kelly you want to be buying aircrafts.
When there is a transaction that makes sense for you and for the seller and that there is a reasonable timeframe of delivery, telling someone you're going to buy airplanes and 20, Turkey, that's pretty crazy stuff.
It's eight years away the escalation of any contract in today's world will not will not be good for you.
Now we did order five 780 sevens and the transaction with Boeing on a customer at the Air show. These five 780 sevens of airplanes were highly confident and we know there's a very strong demand for those airplanes and has been for the last two years, that's because of our global position as being the biggest player in the world we.
He knew where the demand was we knew where the customer was and we had it all done in 24 hours.
So that's why it got it and that got me will be aircraft replaced when we bought them.
That's great and I appreciate the color.
And then just for my second question.
Congrats on the positive outlook.
Can you just remind me what the Bogies are from Fitch and Moody's.
For your leverage and to either be.
Upgrading or replacing what the Moody's.
Yeah.
Sure so.
So as you know we target.
Our target is to have two seven times debt to equity.
That's what we've conveyed to the rating agencies and I think in order to get an upgrade.
I think that we could achieve that.
That leverage target. So I don't think that we would necessarily have to go below that target in order to do it and really that's because what we have what we have demonstrated to the rating agencies and talk to them about is the resilience of the business showed throughout Covid plus.
Plus having done the <unk> acquisition, how much stronger that's made the company and so I think the two of those things are a pretty compelling argument for it I think that the if you if you look at what could.
What are kind of the gating items I would say towards getting an upgrade I think part of that has seen the recovery progress more glue.
Globally.
And and seeing some of the issues around Russia and things like that recede into the distance I think that's more important obviously, we're going to be Delevering. You can see that we were at two eight times debt to equity. This quarter. We had targeted two seven times by the end of the year I think we're a little ahead of schedule on that.
So so that's all positive and I think we're positioned well for that to happen.
Got it I appreciate the questions.
Alright, now we'll take a question from Ron Epstein with Bank of America. Please go ahead.
Hey, everyone. This is actually Andre on for for Rod.
I wanted to ask about the GE lockup period on sale that first tranche.
Wind up August 1st have you guys had any conversations with those investors like any expectation for any sale.
Any color you could provide there would be really helpful. Thanks.
Yeah on that that's really a question for Qi.
So you guys have been having a conversation with those investors at all it's all just you.
Well, let's hope the Chi Wen and they decided to sell and what quantum they decided to sell it.
We've talked to investors of course, all the time about the business.
The decision about what's going to happen with the shares is completely in the hands of Gee, our focus can only be on running the business as well as we possibly can.
Fair enough alright.
I'll, yes, I'll leave it to one thanks guys.
Alright, and then we'll take a follow up question from Moshe Orenbuch with Credit Suisse. Please go ahead.
Great. Thanks, maybe just recognizing that you're.
Leverage did go from I think $2 94 down to two eight.
Fairly close to that two seven.
And Pete I think you just said in response to an earlier question that you don't really need to go below that.
I mean, it seems likely that you would reach that target during Q3.
Okay. If you haven't already could you can you can you just talk a little bit about what that flexibility would games.
Give aercap.
Sure.
So look I think Moshe it is possible that we could get there earlier than earlier than we expected as I said, we're running somewhat ahead of schedule and we'll have to see how that plays out during the rest of the course of the year and look obviously I mean, two seven is the gating item in terms of.
Once you get there then you have excess capital you are starting to create excess capital that you can deploy and so we'll have to look at it that at that point, but that would that.
That obviously would give us more flexibility there and similarly I think there was a question earlier about about sales. So if we're able to do more in sales I think confident that we can get $2 billion done this year, but going forward you know if we can do more in the future then than we than we had targeted that's helpful too for that.
I guess I should also say that from a balance sheet perspective, we're in a very strong position now we have a lot of liquidity as you can see.
We have very low debt maturities for the rest of this year, we actually have a or we have one bond that comes due this year and we're paying that off.
Next week, so very little to do I don't think that we would have to do any issuance and the debt side. This year.
And that's really because of those limited maturities capex profile of $2 2 billion for the remainder of the year and strong operating cash flow. So I think we're in a in a good position on all those fronts to have more flexibility as we get towards the end of the year and into next year.
Great.
Also add to that is as Pete said, we have no need to raise any funding for the remainder of the year and indeed our.
Our interest line is pretty much fixed at the average duration of our fixed rate debt is at six five odd years.
So that is how long are 90% of our debt is fixed for.
Thanks, guys.
Sure sure.
And we have no additional questions in the queue I will now turn the call back to Angus Kelly for closing remarks.
Thank you and thank you all for joining us for the call and we look forward to seeing you shortly.
The Deutsche Bank Conference in September and meeting many of you. There. So thank you for your time.
Yeah.
And this does conclude today's call. We thank you again for your participation you may now disconnect.
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Yeah.