CAI beats quarterly estimates, shows strong growth potential

INTERMODAL container lessor, CAI International, posted fourth quarter 2009 profits of US$3.1 million, narrowly beating analyst forecasts, though still a big improvement on 2008 loss of $44.4 million.

Net profit, which included a restructuring charge in 2009 related to the CAI Consent acquisition, and a goodwill impairment charge in 2008, was still down year-on-year with revenue also down 48 per cent.

Despite a reversal in fortunes seemingly still out of reach, CEO Masaaki Nishibori took an optimistic approach on the company's prospects, citing continually increasing demand for containers in the latter half of 2009 and early 2010, with February recording the most lease outs for any month since August, 2008.

"The improved lease out activity during the first quarter of 2010 from the fourth quarter of 2009 is particularly promising considering that the first quarter is traditionally one of our seasonally weakest quarters for new lease outs," he said. "Our bookings for future lease outs remain strong and we expect continued good demand in the coming months."

Current utilisation rates, reported to be above 80 per cent, appear to be in support of Mr Nishibori's outlook. The numbers are largely being attributed higher freight volumes than expected, as well as an apparent manufacturing constraint on the ability to produce new containers, which has caused an artificial shortage.

Mr Nishibori continued to note that the acquisition of CAI Consent in 2008 - despite compelling a hefty integration charge for the quarter - has nevertheless proved to be a successful move overall. "It has allowed us to further cross-market both specialised containers and traditional ISO dry vans, while at the same time reduce our overall overhead costs by approximately $1 million per year," he said.

"We are optimistic about the prospects for 2010 and although our profitability in 2009 was lower than in 2008 after adjusting for the goodwill impairment, we were profitable in every quarter of 2009 and believe it shows the resiliency and strength of our industry," he said.

(Source: www.schednet.com)