LeasePlan reports net profit of EUR 123 million for first six months of 2012
Almere, Netherlands - 28 August 2012 - LeasePlan, the world's leading fleet and vehicle management company, today published its interim results for the first half of 2012.
Highlights of the results include:
• Net profit for the six-month period ended 30 June 2012 of EUR 123 million.
• Lease portfolio increased to EUR 14.9 billion.
• Tier 1 and BIS ratios of 15.1%, up slightly from the 2011 year-end value of 14.9% for both.
• Successful conclusion of two senior unsecured debt capital market transactions of EUR 500 million and EUR 700 million respectively in the first two months of the year.
• Repaid a large share of the bonds raised under the Dutch Government Credit Guarantee Scheme, EUR 1.25 billion in February and USD 2.5 billion in May.
• LeasePlan Bank retail deposits reach EUR 3.9 billion.
Full details of LeasePlan’s results for the first six months of the year can be found in the Interim Report 2012.
Statement from Vahid Daemi, Chairman and CEO LeasePlan Corporation:
“LEASEPLAN CONTINUES TO GENERATE STEADY PROFITS IN AN UNSTEADY GLOBAL ECONOMY”
In the face of economic, political and regulatory changes and challenges across the world and in particular the eurozone, LeasePlan continues to perform well and absorb the unpredictable effects of the global market.
Profit for the first half of 2012 stands at EUR 123 million, down from the same period in 2011 by EUR 13 million. This difference is attributable to the one-off special income element of EUR 30 million and one-off post employment benefits that were included in the first half of 2011. When viewed against these items our profit level for 2012 remains consistent with the previous year’s first half results. Even though we could not qualify this any longer as “returning to pre-crisis performance” as stated in previous reports, we can fairly say that LeasePlan’s results have over the past years proven to be rather “crisis-proof”.
Compared to the first half of 2011 it is also fair to say that many economies in which we operate have far worse prospects than a year ago. In terms of business growth we experienced a reduction in the number of vehicles in our business, from 1,328,000 vehicles as of December 2011 to 1,327,000 vehicles as of June 2012. This reduction of 1,000 vehicles compares to a growth in the first half of 2011 of 3,000 vehicles and is primarily due to the recession occurring in several countries in which LeasePlan operates.
Despite the overall underlying result being stable and strong, some of the individual components do show variations. Total operating and net finance income decreased in the first half of 2012 compared to the same period in 2011 by EUR 12 million (-2%). As previously mentioned, the main cause of the decrease is the one-off income element included in 2011 of EUR 30 million regarding a settlement with tax authorities on indirect taxes (VAT).
LeasePlan did experience strong performance in net interest income, which increased by EUR 16 million. This is primarily due to an increased volume of the lease portfolio, which in turn is caused by an increased value of the average lease contract.
The results of vehicles sold continues to show a mixed picture with some European countries
experiencing material losses on the resale value of terminated leases whereas in other
countries the results have been more positive. Overall, results of vehicles sold turned into a
positive contribution of EUR 10 million from the previous year’s negative figure of
EUR 3 million. Additionally, we continue to further exploit economies of scale in terms of volume with our suppliers.
Total operating expenses increased in the first half of 2012 as compared to the same period in 2011 by EUR 7 million (+2%), despite the one-off elements to a magnitude of EUR 13 million, mainly in relation to post employment benefits provided to employees that were included in 2011. Therefore, underlying expenses increased by approximately 6%.
STRONG LIQUIDITY POSITION
As part of the sweeping market-wide review by Moody’s on European bank ratings, our long-term debt and deposit ratings were downgraded in June by two notches to Baa2 with a stable outlook. This reflects the overall negative sentiment towards the banking industry as a whole.
Despite this context, investors continued to express their confidence towards the company and our funding diversification strategy remained on track. During the first two months of the year we concluded two senior unsecured debt capital market transactions of EUR 500 million and EUR 700 million respectively. In addition, retail bank deposits in LeasePlan Bank reached a total of EUR 3.9 billion. In April we successfully placed GBP 582.1 million (EUR 757 million) of securities backed by our UK leasing portfolio. We also repaid a large share of the bonds raised under the Dutch Government Credit Guarantee Scheme, EUR 1.25 billion in February and USD 2.5 billion in May. The remaining bonds (EUR 1.5 billion and USD 500 million) will be redeemed in 2014. Our Tier 1 and BIS ratios of 15.1% are both up slightly from the 2011 year-end value of 14.9%.
OUTLOOK FOR THE SECOND HALF OF 2012
Despite the unpredictable nature of the external operating environment, we remain confident in the strength of our continued business performance in the majority of countries in which we operate. We intend to continue to take caution regarding the ongoing volatile behaviour of the financial markets that is affecting certain countries and in particular their respective governments. These situations threaten to undermine economic growth in these countries, and LeasePlan continues to monitor developments accordingly. Overall, we do expect to achieve a positive result in the second half of 2012, although not necessarily at the same level as the first half of the year. We remain confident in our funding diversification strategy and the scale of our business model. In addition, we believe that our people will continue to put their energy into serving our clients and finding solutions for them globally.
The financial and other information in this release may contain certain forward-looking statements (all statements other than those made solely with respect to historical facts) based upon management's beliefs and data currently available to management. These forward-looking statements are based on a variety of assumptions that may not be realised and are subject to significant business, economic, legal and competitive risks and uncertainties. Our actual operations, financial condition, cash flows and operating results may differ materially from those expressed or implied by any such forward-looking statements and we undertake no obligation to update or revise any such forward-looking statements.
Journalists requiring further information should contact:
LeasePlan Corporation N.V.
Peter Staal, Media Editor
T: +31 (0)36 529 3647
T: + 353 1680 4005
LeasePlan is a global fleet and vehicle management company of Dutch origin. Our full service offering consists of financing and operational fleet management services to meet the needs of a diverse client base. Established 49 years ago, we have grown to become the world’s leading fleet and vehicle leasing company with over 85% of our over 6,000 person workforce now operating outside of the Netherlands. Our global franchise manages around 1.3 million multi-brand vehicles and provides fleet and vehicle management services in 30 countries. We have a proven track record in enhancing our presence in traditional mature fleet markets, as well as expanding into new markets and growing our business to market leading positions. We are able to capitalise on our global presence and international network by providing innovative products, value for money and superior service to meet the needs of both national and multinational clients. We aim to do this by using our expertise to make running a fleet easier for our clients. This is reflected in our universal promise to all our clients: ‘It’s easier to leaseplan’.
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