Textainer Group more than doubled its net profit to $51.7 million in the second quarter, up 106 percent year-over-year, but the container lessor halted orders for standard dry freight containers amid slowing demand.
Textainer’s jump in profit included a $19.8 million gain on sale of containers, increases in the company’s owned fleet and daily rates, and improved utilization.
Revenue rose 42 percent to $105.7 million. Net income excluding unrealized losses on interest rates swap and the gain on container sales rose 49 percent to $40.4 million. Earnings before interest, taxes, depreciation and amortization increased 61 percent to $86.5 million.
Last year’s recovery in shipping demand combined with recession-driven cutbacks by container manufacturers to produce a sellers’ market for leased containers. Lessors also benefited from increased reliance on leased boxes by capital-constrained ship lines.
Now circumstances may be returning to a more normal pattern, although Textainer said it expects high utilization to continue at least through the rest of 2011.
Textainer said demand for its standard dry boxes slowed in the second quarter, and that the company did not order new dry containers for July or August production.
“Unless the traditional peak season occurs during Auguust and September, it is unlikely that we will order new standard dry-freight containers for the next few months,” Textainer said.
“Conversely, the demand for refrigerated containers remains strong,” the company said. “We have already ordered more than twice as many refrigerated containers for delivery through December 2011 than in each of the three previous full years.”