[120512.EN.SEA] TAL Leasing Quarterly Revenue Up 23.7pc As Promising Year Unfolds

TAL, one of the world's largest lessors of intermodal freight containers and chassis, announced that leasing revenues in the first quarter of the year surged 23.7 per cent to US$123.2 million.

First quarter net profit, excluding gains and losses on interest rate swaps, increased to $31 million from $27.4 million in the first quarter of 2011.

The company said it has continued to invest aggressively in its business. Year to date, TAL has invested over $450 million in new container purchases and sale-leaseback transactions.

"TAL's results in the first quarter of 2012 provide a strong start to what we expect will be another outstanding year," said TAL International chief executive Brian Sondey.

"We have ordered over $450 million of new and sale-leaseback containers for delivery this year, which puts us slightly ahead of where we were at this point in 2010 and 2011. Most of these containers are already committed to leases and we expect customer pick-ups to accelerate in the second quarter as we head toward the summer peak season for dry containers."

"Our performance so far in 2012 continues to be supported by attractive market fundamentals. The supply/demand balance for containers remained tight through the winter slow season, and our utilisation stood at 97.7 per cent as of April 26. Trade growth is expected to remain solidly positive this year, most of our customers continue to be reluctant to purchase new containers directly, new container purchase prices have been increasing steadily from the beginning of the year as seasonal demand has increased, and used container sale prices remain high - moderating from peak levels reached last year more slowly than we had expected."

Mr Sondey expects strong market conditions to persist throughout the year. We expect TAL's operating performance to remain near peak levels. Leasing revenue will get a boost in the second quarter as new containers start to go on-hire in large numbers, and we also now expect used container sale prices to remain firm through the summer peak season for dry containers," he said,

But Mr Sondey still fears a double dip recession and major customer default. "We don't currently consider either of these events likely, but we are wary of a variety of potential event risks for 2012 due to the current high level of uncertainty in the global economy and the significant financial pressures facing our customers," he said.

Source : HKSG, 05.05.12.