Element Fleet Management announced financial results for the first quarter ended March 31, 2020 and continued progress on its transformation program.

Element’s core fleet business generated adjusted operating income of C$134.8 million ($96.36 million) in Q1/20. On a year-over-year basis, core adjusted operating income increased C$12.8 million ($9.15 million) from Q1/19.

Element is withdrawing its 2020 adjusted EPS guidance given the uncertainties of the economic impact of COVID-19 on the company’s clients and therefore its business. The company Q1/20’s results include a C$12 million ($8.58 million) provision for credit losses, increasing its balance sheet allowance for credit losses to C$20.0 million ($14.3 million) or 0.16% of total finance receivables before the allowance.

“Our unwavering focus on delivering a consistent, superior experience across our blue-chip client base yielded another solid quarter for our core business,” said Jay Forbes, president and chief executive officer of Element. “The benefits of our ongoing work to transform our organization and strengthen and de-leverage our investment grade balance sheet are not only evident in our Q1 results, but also in the continuity of our operations, our abundant liquidity and the performance of our people in the face of COVID-19.”

“In the final weeks of Q1, our organization quickly adapted to the new realities of life during the pandemic,” continued Forbes. “As I communicated last month, our business remains safe and sound. Nearly all our employees are working remotely and continue to do so safely and productively. Our people, processes and systems are supporting our clients as they address the challenges and opportunities that COVID-19 presents for their businesses.”

“The results that we released today include an increase in our allowance for credit losses reflecting our best estimate of the potential impact of this event on our business. While near-term uncertainties have compelled us to withdraw 2020 guidance, and our forthcoming quarterly results in 2020 will no doubt also be impacted by reductions in our clients’ activity, in many ways our learnings thus far in Q2 have only given me and my leadership team more confidence in the stability and resilience of our business model,” Forbes added. “Element is ready to emerge from this disruptive period with momentum and I believe the opportunities for our business may be even greater in the fullness of time as a result of the economic consequences of the COVID-19 pandemic.”