ALD's Q1 results show resilience in face of corona crisis

ALD's first-quarter results for 2020 show the first impact of the corona crisis, but they also reflect the company's inherent resilience. “Our efficient remote-working arrangements and state-of-the-art digital tools allowed our staff to continue to address our clients' immediate needs,” says Tim Albertsen, the company's new CEO. 

Some highlights from ALD's Q1 2020 results:

ALD Fortune

• At the end of March, ALD managed a total fleet of 1.78 million vehicles worldwide. That's 5.6% more than the same time last year.
• Already calculating in COVID-19 risks, used-car sales results were €3.2 million, implying a result of €43 per used car.
• ALD netted €10 million in after-tax profit from the sale of its stake in ALD Fortune in China.
• The margins for leasing contracts and services were at €326.3 million, up 3.1% versus A1 2019.
• Group net income stood at €128.9 million, down 3.7% versus Q1 2019.

A deep-dive in the figures shows that the initial impact of the economic restrictions due to COVID-19 is apparent in the slowdown of portfolio growth from March. 

Dividend proposal
ALD wisely provisioned €9 million for the expected increase in used-car stock and counterparty risk – an amount that is more than compensated by the sale of ALD's Chinese business. ALD's income base is stable. The company is therefore maintaining its proposal to pay a dividend of €0.63 per share. 

Nevertheless, with net results down year on year, it's clear that the corona crisis has had an impact; the uncertainty about the overall impact of the ongoing crisis also makes it difficult to forecast whether ALD will meet its whole-year objectives.  

However, ALD's fundamentals are strong, with relatively low costs and good access to funding; which according to well-informed sources puts the company in a position to even acquirie new businesses in the months to come. 

Reassuring performance
“Despite the challenges, our operating and financial performance in Q1 was reassuring and reflects the robustness and geographical diversification of our business model,” says Mr Albertsen. “At the same time, ALD has taken an active role in supporting those on the frontline of the crisis by lending our assets and making donations, in a great number of countries.” 

“As our main markets progressively emerge from confinement we are positioning ourselves to seize new opportunities, for instance by responding to the demand for flexible products and promoting our used car lease offer, while paying careful attention to our costs.”

Image: Eolocom, CC BY-SA 4.0