Element Reports Q3 NBV up 40%; Fee Income 56% of Total Revenue

Element Fleet Management, formerly Element Financial, reported financial results for the company’s continuing operations for the three-month and nine-month periods ending September 30, 2016. The reported results also included results for the distributed operations that form ECN Capital following the separation of Element Financial into two publicly traded companies on October 3, 2016. The following commentary pertains only to the continuing operations of Element Fleet Management.

The following highlights were excerpted from the Element Fleet Management news release:

  • For Q3/16, the company reported after-tax adjusted operating income of $105.0 million, of which $96.1 million or $0.25 per share (basic) is attributable to common shareholders and is in line with the consensus of analyst estimates versus $0.25 per share (basic) reported in the previous quarter and $0.17 per share (basic) reported in the same three-month period last year.
  • Service and fee revenue was $127.8 million versus $126.6 million for the previous three-month period ending June 30, 2016 and $59.3 million for the same period last year. Services and fee revenue accounted for 56% of total fleet revenue versus 54% for the previous three-month period ending June 30, 2016 and 45% for the same period last year.
  • Originations for the three-month period ending September 30, 2016 were $1.57 billion versus $1.70 billion for the previous three-month period ending June 30, 2016 and $1.12 billion for the same period last year.
  • Total earning assets as of September 30, 2016 were $13.8 billion versus $13.5 billion as at the end of the previous three-month period and $13.9 billion as of September 30, 2015.

“Advanced analytics, connectivity and shared transportation are transforming the fleet services model,” said Bradley Nullmeyer, Element Fleet Management’s chief executive officer. “The scale, depth and advanced analytics capabilities we have built at Element put us at the center of the connected car opportunity to deliver more value for our customers.”

“We had a solid quarter with stable service and fee revenue when compared on a sequential basis and an 115% increase from the same period in the prior year,” said Daniel Jauernig, Element’s president and chief operating officer. “In the first nine months of this year, we have signed more than 100 new clients, representing a total fleet size of more than 200,000 vehicles and a future revenue stream that will build to more than $29 million annualized run rate in the next three years.”

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