Trencor posts 19% rise in interim earnings, lifts dividend

15 August 2012

Trencor Ltd lifted headline earnings per share for the six months to 30 June 2012 by 19% to 262,3 cents from 219,3 cents in 2011 after Textainer Ltd, the NYSE-listed company in which Trencor has a 60,09% beneficiary interest, was able to maintain utilisation of its marine cargo container fleet at high levels.

Adjusted headline earnings per share, which exclude the effect of unrealised foreign exchange translation gains and losses, were 256,7 cents (2011: 209,7 cents). The 2011 figure included non-cash gains of 32,9 cents per share on the sale by Textainer of containers to the prior non-controlling interest following the restructuring of the company’s primary asset-owning subsidiary Textainer Marine Containers Ltd.

Trencor said trading profit which is mainly earned in US dollars, after net financing costs, for the six months to 30 June increased by 2% from R763 million to R777 million. The increase was 23,5% from R629 million in 2011 to R777 million if the non-cash gain realised last year on the sale of containers last year is excluded.

An interim dividend of 65 cents per share (2011: 50 cents) was declared.

Trencor’s chairman, Neil Jowell, said that based on the spot exchange rate of R8,24 to the US dollar and the price of a Textainer share at US$36,90 the company’s net asset value per share on 29 June 2012 was R58,82.

Mr Jowell said Textainer’s net half year profit, adjusted to conform with International Financial Reporting Standards, was US$97,3 million (2011: US$92,1 million). The 2011 figure included the non-cash gain on the sale of containers referred to above, amounting to US$14,8 million. Textainer declared quarterly dividends of US$0,40 cents and US$0,42 cents per share respectively for the first two quarters of 2012.

He said Textainer, which had fleet utilisation at 30 June of 98,1% (2011: 99,0%), had invested more than US$760 million in new and used containers as well as purchases from its managed fleet since the beginning of 2012. Textainer continued to expand its share of the refrigerated container market and about 25% of the new purchases were refrigerated containers.

Mr Jowell said that at 30 June Textainer owned 60,4% of its total fleet under management, against 57,3% in June 2011. The total fleet comprised 2 615 000 twenty foot equivalent units (“TEU”), 80% of which were committed to long-term operating, financing and sales-type leases. This compared to 78% a year ago when the total fleet was 2 442 000 TEU.

He said that in April, a Textainer subsidiary had issued US$400 million 10-year, container-backed notes at a fixed annual interest rate, payable monthly, of 4,21%. Textainer’s securitisation facility had also increased from US$850 million to US$1,2 billion. The interest rate on the new facility was 2,625% p.a. over one-month LIBOR during the initial two-year revolving period.