Element Financial Corporation reported financial results for the three-month period ending March 31, 2016. After-tax adjusted operating income for the three-month period ending March 31, 2016 was $143.3 million or $0.35 per share (basic), in line with consensus estimates, versus $60.4 million or $0.21 per share for the same period last year. Before-tax adjusted operating income was $182.9 million, or $0.45 per share, compared to $78.4 million, or $0.27 per share for the same period last year.
New originations were in line with consensus at $2.1 billion for the three-month period ended March 31, 2016 representing a 40 percent increase over the $1.5 billion reported for the same period last year. Fleet Management accounted for $1,590.3 million of Q1 originations while Commercial Finance (Vendor Finance, Rail Finance and Aviation Finance) accounted for $523.5 million.
“We had strong first quarter results from all of our businesses with exceptional results coming from Element Fleet,” said Steven Hudson, Element Financial Corporation’s Chief Executive Officer. “I’m also pleased to report that during the quarter, the integration of the acquired GE fleet businesses was well advanced and management continued to move forward with plans to separate Element into two public companies that will be easier for investors to value against comparable peers – a stand-alone pure play fleet management and services business dominated by services revenue and a separate commercial finance business set to transition to a fee-based asset management model,” added Mr. Hudson.
“Services is what drives Element Fleet’s value proposition for our clients which is why at 56 percent of total Q1 revenue, the Services & Fee component of our revenue mix has now become the dominant driver of our earnings,” noted Bradley Nullmeyer, Element Fleet’s Chief Executive Officer. “This capital-light revenue stream has a very beneficial impact on Fleet’s ROAA and together with a higher target leverage ratio, delivers higher equity returns and justifies the premium earnings multiple that the market typically accords to pure fleet management companies. I’m also very pleased that we’ve progressed faster than expected in meeting our integration objectives which has allowed us to accelerate plans to re-engage tuck-in M&A opportunities in the fleet management industry where we can be actionable in the second half of 2016,” added Mr. Nullmeyer.
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