Element Reports 40% Y/Y Increase in Originations, Triples Dividend



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

The following highlights were excerpted from the news release:

  • Net interest income and rental revenue, net of interest expense and provision for credit losses, grew by 52% to $422.9 million.
  • Total earning assets were $13.97 billion down 4.4% versus $14.62 billion as at December 31, 2015.
  • Originations were $6.6 billion up 40.4% from $4.7 billion in the previous year.
  • 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.
  • Tangible leverage was 7.6:1 as at December 31, 2016 up from 4.1:1 as at December 31, 2015.

Element’s board of directors also approved management’s recommendation for a threefold increase in its annual dividend to $0.30 per common share. Element said it 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, EFM’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 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,” said Daniel Jauernig, Element’s president and chief operating officer.

“Element delivered solid financial results in 2016 while also successfully achieving all of its strategic objectives. Performance during the year was predictably impacted by some one-time costs related to the integration and separation, and these are largely behind us,” said Samir Zabaneh, Element’s chief financial officer. “As Element’s operations continue to normalize, among our priorities for 2017 is to revise our key performance indicators to reflect our transition to a fleet-focused business services provider.”


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