Textainer reports increased revenues in third quarter

Textainer Group Holdings has reported total revenues of $149.4m for the third quarter, a $23.8m increase (or 19 percent) from the third quarter of 2017, driven by strong lease-out and resale activity.

The company reported an adjusted EBITDA of $111.3m for the quarter, an improvement of $10.7m from the third quarter of 2017 and $2.2m from the second quarter of 2018. It also recorded a net income of $1.9m for the quarter, a decrease of $16.6m from the third quarter of 2017 and $15.6m from the second quarter of 2018.

Utilisation averaged 98 percent for the quarter and is currently at 98.6 percent, an improvement of 130 basis points from the average in the third quarter of 2017. The company noted its continued growth with container investments of $820m delivered year-to-date, including over $290m of new production received during the third quarter; and effective September 26, 2018, it amended its revolving credit facility to increase its size to $1.5bn, lower its pricing by 50 basis points, and extend the term to five years.

“Our third quarter performance reflects the continued positive results of our fleet growth and high utilisation rate. Lease rental income increased $8.3m from the previous quarter, marking the eighth-consecutive quarter of lease rental income growth. The average yield of our fleet continued to improve as we locked-in more long-term leases at rates higher than our current fleet average,” stated Olivier Ghesquiere, President and Chief Executive Officer of Textainer Group Holdings Limited.

“However, our net income was negatively affected by impairment charges and recovery costs for two defaulting regional shipping lines in Asia. We have now recovered the majority of containers worth recovering and believe the impact of these defaults are mostly behind us. In addition, we decided to dispose of economically unleasable containers which resulted in an impairment write-down during the quarter. Their disposal will help save on storage cost while taking advantage of the current positive resale market to monetise their remaining value.

“We saw strong demand ahead of the Golden Week with 165,000 TEU picked up during the quarter, which included 137,000 TEU of new production. These new containers went on operating leases with an average minimum contractual term in excess of six years and favourable return schedules. Drop-off activity was limited, resulting in a quarterly lease-out to turn-in ratio of 2.5 to 1. Given the strong demand environment, industry-wide factory inventory was further reduced to 600,000 TEU.”

For more information visit: www.textainer.com

6th November 2018