Element Fleet Management released its Q2/17 financial results, reporting core fleet management net revenue was C$436.5 million ($344.09 million) in the first half of the year, down 2.9% from C$449.7 million ($354.5 million) in the first half of 2016.

Other fleet management financial results from the first half of 2017 include:

• Core fleet management service and other revenue was C$271.8 million ($214.26 million), up 0.8% from C$269.6 million ($212.53 million) year over year.
• Core fleet management net interest and rental revenue was C$164.6 million ($129.75 million), down 8.6% from C$180.0 million ($141.89 million).
• Core fleet management after-tax adjusted operating income was C$139.7 million ($110.13 million) compared with C$150.9 million ($118.95 million) in the first half of 2016.
• Core fleet management originations were C$3.29 billion ($2.59 billion), relatively unchanged from the same period a year ago.
• Core fleet management total average earning assets were C$12.47 billion ($9.83 billion), down 2.9% from C$12.84 billion ($10.12 billion) in the first half of 2016.

“We continue to execute on our goal of being the world leader in delivering technology-enabled services to fleet customers,” said Bradley Nullmeyer, Element’s CEO. “Segmenting our business between our growing fleet management operations and non-core assets will provide investors with greater clarity as we pursue this objective, and help us to manage the non-core assets in a way that maximizes value and the return of capital to our shareholders.”

In Q2/17, Element recorded a loss of $10.9 million before tax from its interest in the non-core 19th Capital Group joint venture. This operating loss comprised of $8.2 million in operating losses and the remaining $2.7 million was related to losses on sale of equipment during the quarter. For the first half of 2017, the operating loss before tax was $21.1 million.

In addition, the company recorded a $30 million reserve against certain assets of the joint venture, which also serves to reduce the carrying value of its equity stake in the joint venture, to allow for increased flexibility for the joint venture to execute on a refreshed strategic plan. This includes increasing the focus on the movement of units to small corporate fleets, expediting the sale or trade-in of certain units and optimizing the size and composition of the fleet to improve overall efficiency. The company anticipates that these actions will serve to right-size the operating fleet, increase utilization rates and improve Element’s cash flows through the operation of newer and more efficient vehicles.