Intermodal container lessor Textainer reported full-year lease rental income of $444.9 million was down 3.4% from $460.4 million a year earlier. However, full-year 2017 net income of $19.4 million compared to a net loss of $52.5 million in 2016. Textainer noted earnings benefited from new container investments and further improvements in utilization.

The following highlights were excerpted from the Textainer news release:

• Utilization averaged 97.4% for Q4/17 and is currently at 97.9%, an improvement of 70 basis points over the prior quarter average and 290 basis points over utilization at the start of 2017.
• Lease rental income decreased $15.5 million for the year, compared to the full-year 2016, primarily due to a decrease in average rental rates, partially offset by an increase in utilization and the average fleet size.
• Gain on sale of containers, net increased $5.0 million for the quarter and $19.4 million for the year, from the comparable periods in 2016. The increase was primarily due to an increase in average sales proceeds per unit, partially offset by a decrease in volume of sales.
• Container impairment decreased $86.6 million for the year, from the comparable period in 2016. The 2017 full year decrease was primarily due to a $51.0 million decrease in impairments to write down the value of containers held for sale to their estimated fair value and a $11.2 million reversal of previously recorded impairments on containers held for sale, both due to rising used container prices during 2017, as well as a write down of $17.4 million on terminated Hanjin direct finance leases in 2016.
• Net investment in containers as of December 31, 2017 of 3,791,610 million is up from 3,717,542 million a year earlier. Average fleet utilization for full-year 2017 of 96.4% was up from 94.7% a year earlier.

“We continue to see strong operating results and positive momentum leading into the new year. Lease rental income increased for the fourth consecutive quarter and is up 8% compared to the first quarter of the year as we benefit from new container investments and further improvements in utilization. The impact of these investments will grow going forward as more new containers are delivered and picked up by our customers,” stated Philip K. Brewer, president and CEO of Textainer.

“Strong earnings momentum continued as reflected in our $4.3 million increase in pre-tax profit. We expect the favorable market conditions we are seeing to continue into 2018, mostly driven by solid trade growth, shipping lines preference to lease, and minimal depot inventory. Yields on new leases have moderated slightly but remain attractive and container prices are holding stable at approximately $2,200. Inventory at the factories has risen to approximately 700,000 TEU, though much of this inventory is already committed to leases and the remainder is appropriate to meet upcoming second quarter demand. Additionally, resale prices have remained high as expected given stable new box prices as well as low depot inventory and container turn-ins.”