Element Financial Corporation - EFN.t

Element Financial Corporation - EFN.t is one of North America’s leading fleet management and equipment finance companies. With total assets of approximately C$23 billion Element operates across North America in four verticals of the equipment finance market - Fleet Management, Rail Finance, Commercial & Vendor Finance, and Aviation Finance.

_______________________________________________On March 2, 2016 the company released Numbers

Element Reports $0.35 per share of After-tax Adjusted EPS in Q4-2015
Exceeding Consensus Estimates

Q4 free operating cash flow per share increased to $0.40 versus $0.32 in the previous period
 Total earning assets increase to $20.5 billion at year end from $9.03 billion at the end of 2014
 Total earning assets at yearend dominated by the US market at 73% while Canada declines to 16%
 Originations increased to $2.54 billion in Q4-2015 versus $1.89 billion in Q3-2015
 Fleet management fees increase to $101.3 million in Q4-2015 versus $53.7 million in Q3-2015
 Pre-tax adjusted return on average common equity increased to 12.6% in Q4-2015 versus 11.2% in Q3-2015
 Portfolio quality remains strong with arrears at 0.16% of finance receivables versus 0.20% at the end of Q3-2015
 Tangible leverage increased to 4.57:1 at December 31, 2015 from 3.72:1 at the end of previous year

TORONTO, Ontario, March 2, 2016 - Element Financial Corporation (TSX:EFN) (“Element” or the “Company”), one of North America’s leading equipment finance companies, today reported financial results for the three-months and year ending December 31, 2015. For the three months ended December 31, 2015 after tax adjusted operating income was $143.5 million or $0.35 per share (basic), exceeding consensus estimates, versus $55.4 million or $0.19 per share for the same period last year. Free operating cash flow was $161.5 million, or $0.40 per share, compared to $71.8 million, or $0.25 per share for the same period last year.
“This quarter provides investors with a first look at Element’s Fleet management business with the acquired GE portfolio fully loaded into these results,” noted Bradley Nullmeyer, Element’s President. “The process of integrating the acquired GE fleet operations is now well advanced and we are pleased to report that we now expect to achieve US$100 million of savings from this integration. As a result, our Fleet business enters 2016 with an adjusted ROAA of 3.2% and is on track to exit the year at 4% plus,” added Mr. Nullmeyer.
Overall, new originations amounted to $2.5 billion for the three-month period ended December 31, 2015 representing a 47 percent increase over the $1.7 billion reported for the same period last year. Fleet Management accounted for $1,620 million of Q4 originations, while the Rail Finance vertical contributed $198 million. Aviation Finance accounted for $306 million of Q4 originations, while the Commercial & Vendor vertical accounted for $422 million. Full year origination volumes amounted to $7.7 billion, which was well ahead of plan with respect to the Company’s previous full-year guidance of $6.5 billion of new originations during 2015, and represented an increase of 63 percent over the prior year.
Financial revenue for the three-month period ended December 31, 2015 was $409.2 million, or 8.3 percent of average earning assets versus, $175.7 million or 8.2 percent of average earning assets in the same period last year. Management fees and other revenue included in financial revenue amounted to $123.9 million during the fourth quarter of 2015 versus $54.8 million in the same period last year, representing an increase of 126 percent.
Interest expense was $119.5 million for the three-month period ended December 31, 2015 compared to $50.0 million for the same period last year. The average cost of borrowing was 2.69 percent during Q4-2015 versus 2.53 percent reported during the previous quarter and 2.66 percent for the same period last year. The cost increase, in each case, was due to the use of more expensive acquisition bank financing to fund the purchase of the GE Fleet operations in September 2015, with less expensive and permanent financing for these assets put in place during late December 2016.
Net financial income for the three-month period ended December 31, 2015 was $289.7 million versus $125.7 million for the same period last year. Adjusted operating expenses for the three-month period ended December 31, 2015 were $128.2 million, or 2.61 percent of average earning assets, versus $53.8 million, or 2.52 percent of average earning assets, in the same period last year with the relative cost increase largely due to the higher cost base of Fleet to provide services that generate service fee income in addition to net yields from leasing activities.
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