Trencor posts increase in earnings

26 February 2014

Trencor Ltd which has a 48,3% beneficiary interest in New York-listed Textainer Group Holdings, the world’s largest lessor of marine containers, lifted adjusted headline earnings for the year to December 31 by 15,5% to 630,7 cents per share from 541,6 cents per share in 2012. These excluded 64,7 cents per share of net unrealised foreign exchange translation and a gain of 97,2 cents per share arising from the modification of debt terms on initial recognition.

Trencor said its trading profit which it earns mainly in US dollars, after net financing costs, increased by 25% from R1 636 million in 2012 to R2 038 million.

Headline earnings were up by 41,6% to 792,6 cents per share from 559,6 cents per share in 2012.

Trencor said that in accordance with International Financial Reporting Standards, container owning company TAC had been consolidated in its results for the first time. Earnings included 16,7 cents per share, being 44,3% of TAC’s profit for the six months to 31 December, and 82,9 cents per share as the value at 31 December of an option to acquire the remaining 55,7% of TAC.

A final gross dividend of 158 cents per share was declared. The total dividend of 230 cents per share for 2013 was 7% more than the 215 cents per share declared in 2012.

Trencor’s chairman, Neil Jowell, said the company’s net asset value per share at 31 December was R77,78. This was based on the spot exchange rate of R10,46 to US$1 and the price of US$40,22 per Textainer share on the New York Stock Exchange on 31 December.

He said Textainer’s net profit for 2013, adjusted to conform with International Financial Reporting Standards, was US$186,2 million, down from the record US$200,2 million in 2012.

“Average utilisation of the Textainer container fleet in 2013 dropped to 94,5% from 97,2% in 2012.” said Mr Jowell. “However, since Textainer earns significantly more on owned containers than managed containers, it continued to increase ownership of the fleet, 84% of which is subject to long-term and direct financing leases.”

“After US$752 million expenditure for the year on buying new and used containers for both owned and managed fleets, Textainer owned 75,7% of the total fleet of 3 040 000 TEU ( twenty-foot equivalent units) at 31 December. At the end of 2012 Textainer owned 72,7% of the then fleet of 2 775 000 TEU.”