TP Aerospace publishes financial results after a year with COVID-19
2020 started out strong for TP Aerospace. With two significant contract signings towards the end of 2019, the company started the year with a record high number of aircraft on contract and in a strong position to capture additional market shares. However, the COVID-19 pandemic turned the entire aviation industry upside-down, which significantly impacted TP Aerospace’s operations in 2020 and forced their growth plans on hold.
Today, TP Aerospace published the 2020 financial results after a year that has been called the worst year in history for air travel demand by the International Air Transport Association (IATA) and where global demand fell by 65.9% compared to 2019.
For TP Aerospace, 2020 revenue ended at USD 67.7m which was 43% below 2019 levels, while EBITDA ended at USD 21.4m compared to USD 37.9m in 2019. These results were driven by a significantly reduced activity level amongst our customer as well as customer loss due to bankruptcies, downsizings, or ceased operations and a stagnant trading market.
Though the results indicate a clear impact of the pandemic on TP Aerospace, the company managed to get through 2020 stronger than most other industry players. The majority of TP Aerospace business come from long-term programs signed with aircraft operators all over the world, and it is especially the mix of program customers that secured TP Aerospace a strong baseline activity during the year.
“2020 was beyond anything we could have imagined, and though the extensive travel restrictions shook the very foundation upon which we have built TP Aerospace, the past year has also affirmed the strength of our business model and customer mix” says Peter Lyager, CEO at TP Aerospace and continues “around a third of the aircraft on a program with us are freight carriers that have generally increased their activity in 2020. On top of that, a significant part of our airline customers operate regional and short-haul flights, which have been less impacted than long-haul operators.”
Additionally, TP Aerospace’s growing footprint in China, where domestic air travel has recovered faster than any other region of the world, also contributed to a steady activity level in 2020. China has been a strategic focus area for TP Aerospace since the establishment of a representative office in 2019.
While most of the industry was grounded in 2020, TP Aerospace added a third leg to its business with the establishment of TP Aerospace Distribution, through which the company provides factory new OEM wheels and brakes piece parts and assemblies. During the year, the company landed an exclusive agreement to take over the distribution of an entire portfolio of wheels, brakes and piece parts on behalf of Honeywell.
“By adding distribution to our offerings, we have strengthened our value proposition towards the global market. We expect that the distribution division will be a driver of growth in the future, and together with our growing program portfolio, we have an even stronger market position than we did a year ago. Therefore, we are preparing for a strong return as the market recovers to its previous strength.” Concludes Peter Lyager.