Element Reports $0.27 per Share Element Reports $0.27 per Share of Free Operating Cash Flow in Q1-2015 on $10.8 Billion of Earning Assets
Wednesday, May 13, 2015
Element Reports $0.27 per Share of Free Operating Cash Flow in Q1-2015 on $10.8 Billion of Earning Assets
16:56 EDT Wednesday, May 13, 2015
TORONTO, ONTARIO--(Marketwired - May 13, 2015) - Element Financial Corporation (TSX:EFN) -
- After tax adjusted operating income per share of $0.21 (basic) increased from $0.19 per share in the previous quarter
- Originations increased to $1.5 billion in Q1-2015 up from $1.1 billion in the same period last year
- Adjusted operating expenses decreased to 2.3% of average earning assets in Q1-2015 versus 2.5% in Q4-2014
- After-tax adjusted operating income return on equity was 8.3% in Q1-2105 versus 8.2% in Q4-2014
- Tangible leverage increased to 3.92:1 from 3.72:1 at the end of previous period
- Book value per share increased to $10.20 at the end of Q1-2015 from $9.34 at the end of Q4-2014
Element Financial Corporation (TSX:EFN) ("Element" or "the Company"), one of North America's leading fleet management and equipment finance companies, today reported financial results for the three-month period ending March 31, 2015. Free operating cash flow amounted to $78.4 million or $0.27 per share for the three-month period. After tax adjusted operating income amounted to $60.4 million or $0.21 per share for the three-month period.
"These results are tracking in line with our business plan and the guidance that we have provided to investors that indicate we expect to generate $1.05 of operating EPS during the year and exit 2015 with earning assets of $15.1 million and tangible leverage of 4.55:1," said Steven Hudson, Element's Chief Executive Officer.
Overall, new originations amounted to $1.5 billion for the three-month period ended March 31, 2015 versus $1.7 billion reported in the seasonally strong three-month period ended December 31, 2014. Fleet Management accounted for $663.7 million of Q1 originations while the Rail Finance vertical contributed $161.2 million. Aviation Finance accounted for $265.3 million of Q1 originations while the Commercial & Vendor vertical accounted for $367.1 million. The US market accounted for 72 percent of the new origination volume reported during the period versus 71 percent in the three month period ending December 31, 2014. These results are in line with the Company's previous guidance of $6.5 billion of new originations during 2015.
Financial revenue for the three-month period ended March 31, 2015 was $187.3 million or 7.9 percent of average earning assets versus $175.7 million or 8.2 percent of average earning assets in the previous quarter. Other revenue included in financial revenue amounted to $53.0 million versus $54.8 million in the previous quarter. Interest expense was $53.6 million for the three-month period ended March 31, 2015 compared to $50.0 million for the immediately preceding quarter ended December 31, 2014. The average cost of borrowing decreased to 2.5 percent in Q1-2015 from 2.7 percent reported during the immediately preceding quarter ended December 31, 2014.
Net financial income for the three-month period ended March 31, 2015 was $133.7 million versus $125.7 million in the preceding quarter ended December 31, 2014. Adjusted operating expenses for the three-month period ended March 31, 2015 were $55.3 million or 2.3 percent of average earning assets versus $53.8 million or 2.5 percent of average earning assets in the previous quarter.
Total earning assets increased by $1.1 billion during the three-month period to $10.8 billion as at March 31, 2015 versus $9.7 billion as at the end of the preceding quarter. Finance receivables increased to $9.2 billion and Equipment under operating leases increased to $1.6 billion as at March 31, 2015 versus $8.4 billion and $1.3 billion, respectively, reported at the end of the preceding quarter.
Total debt increased to $9.1 billion as at March 31, 2015 from $8.1 billion as at December 31, 2014. The Company's tangible leverage ratio increased to 3.92:1 as at March 31, 2015 versus 3.72:1 as at December 31, 2014.
"During the first quarter, more than 72 percent of our new business volume and 71 percent of our financial revenue were derived from the US market," said Mr. Hudson. "With 69 percent of our earning assets now domiciled in the US and the demand for capital equipment in this market expected to continue to show strength through the current fiscal year, we expect to exit 2015 with a portfolio of earning assets that is 75 percent weighted in favour of the US economy."