Textainer reverses loss with US$17.7 million profit as leasing rises 12pc
TEXTAINER Group Holdings, a major lessor
TEXTAINER Group Holdings, a major lessor. of intermodal containers, reversed itself from a US$9.35 million quarterly net loss in 2017 into a second quarter net profit of $17.5 million, drawn on revenues of $140.7 million, up 17.6 per cent year on year.
Year to date, Textainer again reversed from a first half net loss in 2017 of $16.3 million to a net profit of $36.2 million, drawn on revenues of $273.9, million, up 11.5 per cent year on year.
Recent good fortune was driven by the positive momentum from favourable market conditions and strong capital expenditure.
Lease rental inome come rose by 11.8 per cent to $121.6 million - its sixth consecutive quarter of growth - primarily due to higher utilisation and increases in the average rental rates and the average fleet size.
Utilisation averaged 97.9 per cent for the quarter, an improvement of 160 basis points from the average in the second quarter the previous year.
New container investments totalled $700 million ordered and/or received year-to-date. Gain on the sale of containers, net increased $5.5 million compared to the second quarter of 2017 due to an increase in average sales proceeds per unit, partially offset by a decrease in the volume of sales.
Said Textainer CEO Philip Brewer: 'We saw a significant surge in lease-outs, starting late June and continuing throughout July, associated with the traditional peak season increase in demand. The steady investments in new containers during the first and second quarters positioned us well to benefit from this surge.
Mr Brewer said that over the past two months customers took on more than 110,000 TEU, yielding a lease-out to turn-in ratio of 2.5 to one. The associated revenue will be fully reflected in our third quarter results.
'We have ordered and/or received delivery of 360,000 TEU totalling $700 million in 2018. New container prices remain stable at $2,200/CEU. Depot inventory remains at historically low levels and we continue to place new orders to replenish lease-outs of our factory inventory.'
Looking ahead, Mr Brewer said: 'The increased lease-out demand we have seen in June and July will continue through the third quarter. Lessors have purchased more than 60 per cent of this year's production. Shipping lines continue to rely on lessors to provide the majority of their container needs for several reasons, including the impact of increased bunker prices on their profitability and an uncertain outlook due to actual and proposed tariffs.'