US-based container leasing company CAI International has reported an average utilisation rate of 99.7% in the first quarter of this year, up 1.5% on the same period last year, but only edging up 0.1% on Q4 2020.
The company leased out US$129 million in new containers on long term leases at an average period of 9.7 years bringing a first quarter return on equity (ROE) to 21.3%. In addition, the company has long term commitments for a further US$350 million in the second and third quarters of this year.
Average CEU utilisation for CAI’s owned container fleet during the first quarter of 2021 was Moreover, the company expects to see strong demand throughout this year as the first quarter, traditionally the weakest quarter saw continued growth.
“Additionally, the global logistics supply chain continues to be stressed as evidenced by the disruptions that were created by the grounding of the Ever Given in the Suez Canal, and the growing congestion impacting the Port of Long Beach. All of these factors point towards continued strong demand for shipping containers,” commented Timothy Page, Interim President and CEO at CAI.
Overall CAI’s Q1 leasing business had seen a slight quarter-on-quarter decrease in net income from US$81.56 million in Q4 2020 to US$80.80 million in the first three months of this year, but that was a substantial increase on the US$69.11 million in the first quarter of 2020.
Page concluded, “We continue to be very optimistic about our business for the remainder of 2021 and well into next year. We have strong and increasing cash flows from a robust forward customer order book that we expect will generate attractive long-term returns. We have virtually no off-lease equipment and see nothing on the horizon that would impact utilisation. On the cost side of the equation, we have almost 80% of our funding costs locked in at very low rates [2.1%] for multiple years. As a result of these favourable factors, we expect to continue to deliver exceptional high teen or greater ROE’s for our shareholders.”