China’s state-owned BOC Aviation is expecting to slip into a net loss of at least $310 million for the first six months of the year, affected by a substantial write down in its Russia business, reports Nikkei Asia.
The Hong Kong-listed unit of Bank of China said in a filing on Sunday evening that it has decided to cut the net book value of 17 leased aircraft remaining under control of Russian airlines to zero from $803.6 million. The company believes “it is unlikely to be able to recover those aircraft from Russia in the foreseeable future, if ever.” It has recovered only one from the country so far since the start of the war in Ukraine.
The net impact of the write-down to its pretax profit is $580.7 million, as it will be partially offset by cash collateral of $222.9 million from the airlines. Nevertheless, the company is not able to avoid a net loss of between $310 million and $330 million for the first half of the year, compared to a profit of $254 million a year ago.