Hanjin-hit Textainer posts US$16 million net loss, but sees profitability ahead
GLOBAL container lessor Textainer widened its first half loss 191 per cent year on year to US$16.3 million, drawn on revenues of US$235.9 million, which declined 7.7 per cent.
Losses in the second quarter increased to 416.6 per cent year on year to $9.3 million, drawn on revenues of $119.2 million from $127 million, a decline of six per cent.
The company explained that lease rental income decreased $11.7 million year on year due to a decrease in average rental rates and lost revenue from the Hanjin bankruptcy.
Philip Brewer, president and CEO of the New York-listed Bermuda-based company said: "We continue to see strong improvement in container leasing market conditions with a quarter-to-quarter increase in lease revenue. New container prices were around $2,150 per CEU [container equivalent unit, or FEU given the price cited] during the quarter while used containers prices continued to increase."
"Due to the need to recover Hanjin containers and financing limitations, our investment in new containers was extremely limited during the first quarter," he said.
"During the second quarter we raised $920 million to pay down existing term debt and bank facilities, enabling us to free up liquidity and acquire new containers.
"A week ago, we were very pleased to assume the management of 182,000 TEU fleet of containers from Magellan Maritime Services," Mr Brewer said.
Gains on sale of containers, net was $5.9 million for the current quarter compared to $0.2 million for the prior year quarter; the $5.7 million increase was primarily due to an increase in average sales proceeds per unit, partially offset by a decrease in volume of sales, said the statement.
Said Mr Brewer: "New container prices have not only remained stable but seem likely to increase in the coming months due to production constraints resulting from the challenges of using waterborne paint during the winter months and increases in component costs.
"For these reasons, we are optimistic. Used container prices have increased 85 per cent since the low point in August 2016 and are now at levels significantly above the residual values we use for depreciation purposes," he said.
"We are excited about our outlook; the lease-out market is strong and a number of sustainable trends appear to be in place for this strength to persist. Should current market conditions continue going forward, we project our revenue to increase significantly," Mr Brewer said.