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Textainer posts US$1.5 million net loss, sales sink 7.8pc

TEXTAINER, one of the largest lessors of intermodal containers, has posted a second quarter net loss of US$1.5 million, based on revenues of $138.1 million, which fell 7.8 per cent year on year.

The New York-listed, Bermuda-based company said it suffered a $19.5 million of container impairments resulting from a write down of containers pending their disposal. Excluding this, adjusted net profit would have been $21.8 million, the company said.

"The main driver of our decline remains the low prices for new and used containers which results in reductions in lease rental income and impairments on containers held for sale," said Textainer president and CEO Philip Brewer.

"On the positive side, we saw an increase in new container prices during the quarter, a strong pick-up in demand and we continued to generate strong cash flow from operations. New prices hit a historic low of $1,200 on 20-foot dry freight containers early in the year," Mr Brewer said.

"Prices increased 20 to 25 per cent during the second quarter but have subsequently declined. Low new container prices combined with a large supply of sales containers continue to put pressure on used container prices."Based on recent discussions with our customers, we believe the strong increase in demand for dry containers we experienced in the second quarter will continue into the third quarter although possibly at a slightly reduced pace," he said.

"New dry freight container production could be less than 1.5 million TEU, compared to 2.5 million TEU produced last year, which is equal to the quantity of containers disposed annually.

"Refrigerated container production is also expected to be below last year's record level. This means the world's container fleet is unlikely to grow and may decline this year," said Mr Brewer.

"As containers are not in an oversupply situation, we expect our utilisation to continue to improve in the third quarter," he said.