The Cronos Group said second-quarter net income fell to $2.5 million from $3.5 million in the year-ago period even as demand surged for all types of containers.
The San Francisco-based container lessor, which owns and manages a fleet of 400,000 TEUs, said in addition to higher interest rates, profits were hurt by comparisons to exceptionally high gains recorded on container dispositions and consultancy projects a year ago.
Gross lease revenue for the quarter ending June 30 increased two percent to $35 million on-year. Cronos said revenue gains were supported by growth in its specialized container fleet and 93-percent overall utilization rate. Operating expenses fell by 10 percent.
The company said it added $88 million worth of new container equipment during the first six months of 2006, most of it specialized equipment such as refrigerated, tank, and dry freight special containers. Earnings from the company's Joint Venture Program increased to $2.6 million in the first half of the year from $1.5 million in the corresponding period of 2005.
Gross lease revenue was $70.3 million in the first half of 2006, up three percent on-year. Net income totaled $5.1 million, up from $7.1 million. That included $2.1 million of non-operating income recognized at the conclusion of legal actions and $1.4 million of legal expenses.