Container company Triton International Ltd has reported an adjusted net income of $15.3 million for the fourth quarter, and a full-year profit of $48.9 million.

The company said it is on target to achieve its target of annual savings of $40 million as a result of last July’s merger between TAL International Group and Triton Container International, which created the world’s largest lessor of intermodal freight containers.

The Bermudian-based company’s earnings were impacted by the bankruptcy of South Korea’s Hanjin Shipping, which was the world’s seventh-largest shipping line.

Triton had 3 per cent of its container fleet leased to Hanjin at the time it filed for bankruptcy at the end of August. Those containers represented a net book value of $243 million. Triton has made a “large effort” to recover 78 per cent of the containers and expects to secure a further 11 per cent of the total in the near future.

The company estimates the Hanjin bankruptcy caused a $29.7 million impact to its year-end results.

Triton had more than $100 million of credit insurance in place at the time of the bankruptcy to cover the cost of recovering its containers and up to six months of post-bankruptcy lost revenues, subject to policy limits.

More than a quarter of the containers it had leased with Hanjin have since been re-leased to other customers, while 4 per cent have been sold or put on sale.

Looking at the wider economic situation, Brian Sondey, Triton’s chief executive officer, in a conference call said: “The global economy is still fragile, and the possibility of protectionism is a concern.”

However, he said that after two difficult years the company saw market conditions improve during the past six months and Triton ended 2016 with strong momentum.

Mr Sondey said the company expects favourable market conditions to continue, while its merger integration remains on track to bring increased savings, and give the company scale and cost advantages.

Regarding scale, he said that as shipping lines consolidate into larger entities “they need larger suppliers and don’t want to have to go to four or five container companies”.

Mr Sondey added: “We can deliver bigger solutions since the merger.”

Triton expects favourable market conditions this year, particularly for dry containers, citing the likelihood that new container production volumes will be constricted in the first half of the year.

The company expects container sale prices to increase “if current new container prices are sustained”.

In its consolidated statement of income, Triton’s total leasing revenue for the fourth quarter was $259.5 million, up from $248 million in the third quarter. Its consolidated assets at the end of 2016 totalled $8.7 billion.

Triton’s adjusted pre-tax income for the fourth quarter was $19 million. It has announced a dividend of 45 cents to be paid on March 30.

Mr Sondey recognised that the dividend was outsize compared to Triton’s fourth quarter profitability, but he expects the company to grow into the dividend if the market recovery is sustained.

Triton has a market capitalisation of $1.76 billion. Yesterday in New York its shares rose 8.6 per cent to $25.81.

Disclosure: the author owns shares in Triton International