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Element Reports 40% Y/Y Increase in Originations to $6.6B

March 10, 2017, 07:05 AM
Filed Under: Corporate Earnings

Element Fleet Management Corp. reported financial results for the Company’s continuing operations for the twelve-month and three-month periods ending December 31, 2016.

Element also announced that its Board of Directors approved management’s recommendation for a threefold increase in its annual dividend to $0.30 per common share ($0.075 per common share on a quarterly basis, to be paid on April 13, 2017 to shareholders of record at the close of business on March 31, 2017).  Element estimates the annual cash payment of the quarterly dividend to common shareholders to be approximately $116.4 million, compared to approximately $38.6 million paid in 2016.

The increase in the quarterly dividend reflects confidence in the Company’s ability to generate significant funds from operations and is part of Element’s overall strategy of efficient capital allocation. The Company will manage its capital to balance prudent investments, both organic and inorganic, to propel its business growth forward, while maintaining disciplined balance sheet management and attractive return to shareholders.

“This was a year of transformation for Element: we successfully completed the separation announced in February 2016 and created a global fleet-focused business services provider, with a balance sheet, technology platform and suite of products to strengthen our leadership position and accelerate our growth further. During this time of change, we also continued to advance toward our strategic and financial goals,” said Bradley Nullmeyer, Element Fleet Management’s Chief Executive Officer. “As we look ahead, we remain committed to growing our business and serving our customers, while creating increasing and sustainable long-term value for our shareholders,” added Mr. Nullmeyer.

Since 2012, Element has acquired four major players in the fleet management industry. The Company made a major leap in completing the integration of these milestone acquisitions. “With integration largely complete and a very successful migration of all our customers onto Xcelerate, in 2017 we will demonstrate the full potential of our new platform to deliver unmatched value for our customers and drive continued growth in our business,” added Daniel Jauernig, Element’s President and Chief Operating Officer.

Key financial highlights for the year ended, and as at, December 31, 2016 include:

  • After-tax adjusted operating income was $421.4 million, of which $385.8 million or $1.00 per share (basic) was attributable to common shareholders, up 45% from $0.69 reported in 2015.
  • Net interest income and rental revenue, net of interest expense and provision for credit losses, grew by 52% to $422.9 million
  • Service and other revenue grew by 96% to $513.7 million and represented 55% of total revenue (net financial income) compared with 49% in the previous year.
  • After-tax adjusted return on tangible equity was 24.1% versus 21.5% for the previous year.
  • Tangible leverage was 7.6:1 as at December 31, 2016 up from 4.1:1 as at December 31, 2015.
  • Total earning assets were $13.97 billion versus $14.62 billion as at December 31, 2015.
  • Originations were $6.6 billion compared with $4.7 billion in the previous year.

Read the full release here.


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