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TAL quarterly profit falls 7pc to US$70 million, but sales up 5pc

SUFFERING historically low leasing rates, upstate New York container lessor TAL International posted a seven per cent first quarter decline in operating profit to US$70 million, drawn on revenues $166 million, an increase of five per cent.

TAL quarterly profit falls 7pc to US$70 million, but sales up 5pc
04 May 2015 - 18:12

Box lessor TAL quarterly profit falls 7pc to US$70 million, but sales up 5pc

SUFFERING historically low leasing rates, upstate New York container lessor TAL International posted a seven per cent first quarter decline in operating profit to US$70 million, drawn on revenues $166 million, an increase of five per cent.

Average used container sale prices were also down 25 per cent from the first quarter of 2014, and the company suffered a $1.4 million loss on disposals in the first three months of 2015. 

Current market leasing rates are well below the company's average lease rates and reached new lows in 2015 due to decreases in steel prices and a more competitive environment, the company said. 

The company's average lease rate fell five per cent year on year. Low leasing rates limits TAL’s profitability on new investments and as the company renegotiates expiring leases, the company said. 

TAL expects global containerised trade growth to be five per cent, and 76 per cent of the company's containers were covered by long-term leases at the end of the first quarter, with an average remaining duration of 3.5 years.

The company rents out two million TEU of dry containers, refrigerated containers, tank containers, open tops, flat racks, chassis, generator sets and palletwide containers. 

Said TAL chief executive Brian Sondey: “TAL achieved solid results in the first quarter of 2015. Our utilisation stands at 97.3 per cent. While the first quarter represents the slow season for dry containers, the global supply / demand balance for containers remains generally favourable and most forecasters expect global containerised trade growth to remain in the five per cent range in 2015.

As to outlook, Mr Sondey said the company was moving into a seasonally stronger part of the year. "We expect our utilisation to remain at a high level and continue to be supported by solid trade growth and a market share shift from owned to leased containers," he said. 

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