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Wall Street JournalTriton International Limited's Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2024
Triton International Limited's Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2024
Triton International Limited, a Bermuda-based company, filed a quarterly report on Form 10-Q for the period ended March 31, 2024. The company has filed all required reports during the preceding 12 months and has been subject to filing requirements for the past 90 days. The company is a large accelerated filer and has 101,158,891 common shares outstanding, all held by an affiliate of Brookfield Infrastructure.
Company Overview
The company is one of the world’s largest container leasing companies. It owns, manages, and leases containers to shipping lines and freight forwarders.
The company categorizes most of its lease agreements as either long-term leases or service leases:
- Long-term leases - Customers commit to leasing specific units for 5-8 years. This provides predictable recurring revenue.
- Service leases - Allow customers more flexibility to pick up and return containers. These leases typically carry higher per day rates.
The company uses CEU as a standard measurement of fleet size, allowing it to sum different container types. For example, a 40-foot container would equal 1.7 CEUs.
Financial Highlights
- Total leasing revenue was $371 million in Q1 2024, down from $398 million in Q1 2023.
- Decrease was driven by lower average lease rates and a smaller on-hire fleet.
- Net income was $126 million in Q1 2024, compared to $150 million in Q1 2023.
- The company has strong liquidity with cash, credit facilities, and operating cash flow totaling over $3 billion.
Fleet Summary
| Equipment Type | % of Fleet (by CEU) |
|---|---|
| Dry | 71.2% |
| Refrigerated | 21.4% |
| Special | 3.5% |
| Tank | 1.3% |
| Chassis | 1.9% |
Lease Portfolio
| Lease Type | % of leases (by CEU) |
|---|---|
| Long-term | 68.4% |
| Finance | 9.2% |
| Service | 6.3% |
| Expired Long-term (on-hire) | 16.1% |
Financial Analysis
Utilization and Fleet Size
- Fleet utilization increased to 98.2% in Q1 2024 from 96.5% in Q4 2023.
- Increase was driven by strong container pick-up activity.
- Fleet book value decreased 1.6% from Q4 2023 due to equipment sales.
- The company invested $286 million in new container orders in Q1.
Expenses
- Depreciation expense decreased by $12 million compared to Q1 2023 mostly due to an increased number of fully depreciated units.
- Direct operating expenses decreased $0.5 million due to lower container repair costs.
- Interest expense increased by $2.6 million mostly due to higher average interest rates.
Liquidity and Capital Resources
- For the trailing 12 months ended March 31, 2024, cash from operations and equipment sales was $1.5 billion.
- As of March 31, 2024, the company had $52 million of cash on hand and $1.9 billion of availability under its credit facilities.
Debt
- Total debt outstanding was $7.4 billion as of March 31, 2024.
- 90% of total debt has either fixed interest rates or fixed rates achieved through derivative contracts.
- In April 2024, the company issued $450 million of securitization debt at 5.55% to repay revolver debt.
Outlook
The company believes its cash from operations, existing cash and credit facilities provide adequate liquidity to meet obligations over the next 12 months.
The conflict in the Red Sea caused supply chain disruptions that increased container utilization and pick-up activity in Q1 2024. However, broader macro uncertainty could impact future performance.