Box shortage boosts Textainer profit 137pc to US$33 million

A MAJOR lessor of intermodal containers, Bermuda-based Textainer Group Holdings Ltd, has announced a third quarter 137 per cent net profit increase to $33.3 million, drawing on revenue of US$75.3 million, an increase of 34 per cent year on year.

"Textainer continues to benefit from a worldwide shortage of containers, the lack of new production, combined with continued retirement of older containers," said a company statement accompanying the results.

For the nine months ending September 30, revenue came to $219.0 million, up 29 per cent, compared to $170.1 million for the prior year comparable period.

Net income attributable to Textainer's common shareholders excluding unrealised losses (gains) on interest rate swaps, net for the nine months was $87.8 million, up $28.3 million, or 48 per cent year on year.

EBITDA for the third quarter was $56.4 million, up 64 per cent year on year, on the back of 12.6 percentage point improvement in utilisation and a 16.2 per cent increase in the company's owned-fleet size.

EBITDA for the nine-month period under review amounted to $153.7 million, up 21 per cent compared to the same period last year, owing to a seven percentage point improvement in utilisation and a 17.8 per cent increase in the company's owned-fleet size, partially offset by a gain of $19.4 million in the prior year comparable period due to the early extinguishment of debt in 2009, a company statement posted on Business Wire said.

"We increased both total revenue and income from operations by 34 per cent and 10 per cent, respectively, compared to the prior year quarter. We increased our average fleet utilisation to 98 per cent for the quarter from 85.4 per cent for the third quarter of 2009," said Textainer president and CEO John Maccarone.

"Complementing this achievement, we utilised our balance sheet strength to purchase a total of 212,620 TEU in new containers year-to-date for delivery through December 2010, approximately 90 per cent of which will be owned directly by Textainer," he said. "Of the 212,620 TEU in new containers produced, approximately 180,732 TEU, or 85 per cent, are committed to long-term leases."

"For 2010, it is estimated that total new container production will only be approximately two million TEU as it took some time for container manufacturers in China to ramp up production to more normalised levels after closing plants last year.

"In addition, the continued use of slow steaming and super slow steaming by container shipping lines requires approximately five to seven per cent more containers to carry the same volume of cargo," it said.

The company added: "We believe that many container shipping lines do not have a sufficient capex budget this year to purchase new containers, and they will therefore continue to rely heavily on leasing companies such as Textainer to meet their requirements.

"Going forwards, Nomura International forecasts new container production will be 3.2 million TEU in 2011. We believe that leasing companies will again provide the demand for the majority of this new production in order to match supply with expected demand."

Textainer has now purchased or ordered over 212,000 TEU of new containers for delivery by the end of 2010 at a total cost of $500 million. It expects to increase the percentage of owned containers in its total fleet to 50 per cent by the end of 2010, up from 45 per cent in 2009.
(Source:www.schednet.com)