LeasePlan nets €20m in Q1
Deducting €87 million due to an inventory valuation allowance and a lease contract impairment due to COVID-19, LeasePlan’s net result for the first quarter of 2020 is €20 million. However, “our underlying net result of €115 million is testament to the strength and resilience of our business,” says CEO Tex Gunning (pictured).
On 31 March, LeasePlan’s global serviced fleet amounted to 1.86 million vehicles, a 1.8% increase over the same time last year. The number of vehicles sold during Q1 stood at 74,800 units, 3.5% more than the same period last year. CarNext.com’s B2C retail sales were up 33% to 11,400 vehicles.
Those solid fundamentals did not prevent the main profitability figures from reflecting the impact of the corona crisis on LeasePlan’s business.
- LeasePlan’s Car-as-a-Service division generated €137.9 million in profit, down 13.3% over Q1 2019.
- CarNext.com, LeasePlan’s used-car marketplace, reported losses of 23.2 million, down 145.7% from -€9.4 million in Q1 2019.
- Adding up both, the underlying net result (€114.7m) was down 23.3%.
- The net result (€19.8m) was down 85%, versus €132 million in Q1 2019.
Decades of profitability
“LeasePlan has delivered decades of profitability, even throughout the financial crisis,” commented Mr Gunning. “Today we find ourselves in unprecedented times. As a regulated business, our experienced team was well prepared to manage the impact of the coronavirus. As soon as the crisis hit, we prepared a liquidity plan. We have a liquidity buffer of €6.7 billion in Q1 2020, highlighting the strength of our diversified funding.”
“Looking ahead, we have established a ‘What’s next’ team to prepare for life after the crisis and ensure we continue to capitalize on the long-term ownership to subscription megatrend that has been driving the structural growth of our industry for the past 50 years. This will be accelerated by our ongoing Digital LeasePlan transformation, which is enabling us to build a fully digital operating model, delivering digital services at digital cost levels.”