Triton profits climb on trade growth

  • Higher demand: Triton International’s net income rose in the second quarter. The company has reported a 98.8 per cent utilisation of its leased containers

    Higher demand: Triton International’s net income rose in the second quarter. The company has reported a 98.8 per cent utilisation of its leased containers

Triton International saw its profit increase to $104.9 million in the second quarter, or $1.30 per share, an improvement of 30 per cent on the first three months of this year.

The Bermudian-registered company is the world’s largest lessor of intermodal freight containers. Its earnings result included a one-off $21 million gain from the sale of a building. The sale of the building also increased the company’s effective tax rate to 13 per cent.

Triton’s adjusted net income was $88.9 million, or $1.10 per share, which was up 11.1 per cent on the first quarter.

Brian Sondey, chief executive officer, noted that the company has generated an annualised return on equity of 16.4 per cent.

He said container pick-up activity was near record levels in May and June, which reflected ongoing trade growth and the start of the peak season for dry containers.

Utilisation level of Triton’s leased containers averaged 98.8 per cent, while the company also benefited from higher sale prices for its used containers.

Mr Sondey said trade growth and container demand have not been impacted by the threat of trade actions or the initial round of new tariffs implemented between the US and China.

He added: “However, the US has disclosed an expanded list of products that will likely become subject to increased tariffs later in the third quarter. The potential for expanded tariffs is adding uncertainty to our market, though our customers and market forecasters are still expecting global container volumes to increase in 2018.”

Triton has ordered $1.4 billion of containers for delivery this year and expects its revenue-earning assets will grow by about 10 per cent during 2018.

Looking ahead, Mr Sondey said: “We are starting the second half of 2018 with strong operating and financial momentum. Container pick-up activity and lease deal activity remain strong, and our key operating metrics remain at high levels.

“Based on the continued growth in our container fleet, continued high utilisation and the currently limited impacts from the tariffs, we expect our adjusted net income to increase sequentially throughout the balance of the year.”

The company’s board has authorised the repurchase of up to $200 million of its shares.

Mr Sondey said: “Given the strong market environment and sizeable attractive investment opportunities, we will continue to prioritise organic investment and growth as the primary use for our capital. However, we believe that an opportunistic share repurchase programme could complement our dividend as another avenue for providing returns to shareholders.”

Disclosure: the writer is a Triton International shareholder

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Published Aug 7, 2018 at 8:00 am (Updated Aug 6, 2018 at 11:07 pm)

Triton profits climb on trade growth

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