Triton profits from exceptional container pricing

Triton International Ltd has reported a $115.2 million profit, or $1.70 per diluted share, for the fourth quarter, beating analysts’ consensus of $1.43 cents per share. Adjusted net income was $114.7 million.

The Bermudian-based company is the world’s largest lessor of intermodal freight containers. For the full year it had net income attributable to common shareholders of $288.4 million, or $4.16 per diluted shares, and adjusted net income of $319.9 million.

The results for the quarter were described as “outstanding” by Brian Sondey, chief executive officer of Triton. The company benefited from strong leasing demand and “exceptional sale prices for used containers”.

Triton performs extreme rebounding volumes in H2 2020

During the first half of 2020, trade activity was weak due to the onset of the Covid-19 pandemic and the impact of the trade dispute between the US and China, according to Mr Sondey. However, there was a rebound in global containerised trade volumes in the second half of the year as lockdowns eased in the US and EuropePreview (opens in a new tab), and as consumers shifted their spending from experiences and services, to goods.

Mr Sondey said: “Our customers generally did not anticipate this rapid rebound in trade, and all major shipping lines have needed to add significant numbers of containers. Shipping lines have been primarily relying on the leasing market to fulfil their container requirements, and Triton has secured a meaningful share of leasing transactions due to our industry-leading supply capability and our strong reputation for reliability.”

Triton has a container fleet of 6.2 million 20-foot equivalent units. At the end of the year it had fleet utilisation of 98.9 per cent. Triton bought $861.8 million of new and sale leaseback containers for delivery last year. And by last week had ordered about $1.7 billion of containers for delivery this year.

Triton predicts further profit growth for 2021

“The vast majority of the containers ordered for 2021 delivery are already committed to leases,” Mr Sondey said.

Triton’s total leasing revenue for the year was $1.3 billion, about $40 million less than in 2019. Its debt fell to $6.4 billion from $6.63 billion, year-on-year.

During 2020, the company repurchased 5.1 million of its common shares, with 1.4 million of those repurchased in the fourth quarter.

Looking ahead, Mr Sondey said: “We are carrying a significant amount of operating and financial momentum into 2021. Trade activity and demand for containers remain very strong.”

He added: “While it is difficult to predict how long the surge in container demand will last, we expect the benefits from the large number of containers already placed on high value leases along with our improved leasing margins from attractive financing activity will be durable.”