Triton profit stable amid trade uncertainty

  • Softening economy: container lessor Triton International reported a fall in second-quarter net income (Photograph by JB Reed/Bloomberg News)

    Softening economy: container lessor Triton International reported a fall in second-quarter net income (Photograph by JB Reed/Bloomberg News)

Bermudian-based Triton International Ltd, the world’s largest lessor of shipping containers, reported net income of $86.4 million for the second quarter amid uncertainty in the shipping industry caused by trade disputes.

The profit was slightly lower than the $88.9 million Triton reported in last year’s second quarter, but on a per-share basis this year’s results were better at $1.15, compared to $1.10 last year.

Brian Sondey, chief executive officer of Triton, described the result as “solid” and said the company realised an annualised return on equity of 16.2 per cent.

“Triton faced mixed market conditions in the second quarter,” Mr Sondey said. “While container supply and demand were generally well balanced, lease transaction and container pick-up activity remained slow despite the start of the traditional summer peak season.

“Global economic conditions have softened this year, and the ongoing trade dispute between the United States and China continues to create uncertainty and impact shipping activity.

“Our utilisation continued to gradually trend down during the second quarter, though it remains strong at 96.8 per cent as of July 19, 2019.”

Second-quarter leasing revenues totalled $338.6 million, up from $329.8 million in the same period last year.

Triton said it has spent $146.7 million on containers for delivery this year. It also repurchased third-party partnership interests in one of its container-owning subsidiaries for $103 million.

Triton declared a dividend of 52 cents per share on its common stock, payable on September 26 to shareholders of record as of September 5.

Shares of Triton fell 3.4 per cent on New York’s Nasdaq stock exchange yesterday to close on $33.09.

The company repurchased 2.3 million shares during the quarter. As of July 19, Triton has bought back 7.1 million shares, since its board initiated the buyback programme in August last year, leading to an 8.8 per cent reduction in its diluted share count.

Mr Sondey added: “Our customers expect trade growth will be modestly positive this year, and we expect container demand will improve somewhat as we move deeper into the summer.

“However, we expect third quarter leasing activity will be less than usual due to the slow start for the peak season and the lack of resolution for the trade dispute between the United States and China.”

Disclosure: the author of this article owns shares in Triton International

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Published Jul 26, 2019 at 8:00 am (Updated Jul 25, 2019 at 10:08 pm)

Triton profit stable amid trade uncertainty

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