LeasePlan announces Q1 gains (and losses)
LeasePlan's results for the first quarter of 2019 proved to be a mixed bag of gains and losses, compared to a year earlier.
“Fleet growth is slowing down to 3%, which is not enough to compensate for the reduction in used-car profit and the investment in digital platforms,” comments an independent expert familiar with the company. "However, profitability remains at satisfactory levels."
Some figures in detail:
- While the net result was stable (-1%) at €132 million, the underlying net result was down 7.1% to €149 million. This is due to long-term strategic investments pf €16.8 million in Digital and CarNext.com, the company said.
- LeasePlan's serviced fleet grew by 3.1% to more than 1.82 million vehicles, with growth coming from both Europe and the rest of the world, offsetting losses in Turkey.
- The underlying gross profit for lease and additional services (Car-as-a-Service, or CaaS) was up 4% to €390.8 million.
- But the underlying gross profit for disposal of vehicles and end of contract fees was down from €25.2 to €18.8 million – this due to €10.8 million less on vehicle disposal.
- Volumes for CarNext.com's B2C business were up 40% to 14,700 vehicles. Used Car as a Service (UcaaS) business was up 22%.
- Underlying return on equity was slightly down, from 17.0% to 16.7%.
“We delivered solid results in both of our businesses (i.e. CaaS and CarNext.com, Ed.) this quarter, while continuing our strategic investments in CarNext.com and our Digital LeasePlan initiative,” said LeasePlan CEO Tex Gunning, who also pointed to solid growth in contracts for repair & maintenance and other services, and to LeasePlan's first-ever Green Bonds, which will be used to purchase or refinance EVs.