ALD’s used-car profit increases sevenfold
In the first quarter of this year, vehicle leasing and business mobility specialist ALD earned a record €3,101 on each used car it sold. That’s a sevenfold increase over the same period last year (€439). The phenomenal boost goes a long way towards explaining ALD’s strong quarterly results, with a net income of €255.3 million, up 64.2% over Q1 2021 (€155.5 million).
Market disruptions aren’t all bad. Delivery delays for new vehicles are pushing up used-vehicle prices, and for lease companies like ALD, that is generating windfall profits. Used-car sales generated a total result of €215.2 million in Q1 2022, versus just €38.2 million in Q1 2021. Note that the difference here is only of a factor 5.5; due no doubt to contract extensions – another consequence of delivery delays – reducing the outflow of ex-lease cars.
Other highlights from ALD’s quarterly report:
- At the end of March, ALD’s funded fleet comprised just under 1.44 million vehicles, up 4.8% over the same time last year.
- The leasing contracts and services margin for Q1 (€329 million, up 4.5% year-on-year) was adjusted for the negative impact of the war in Ukraine (-€27.3 million) and for the positive revaluation of the fleet (+€12.5 million).
- The cost/income ratio (excluding used-car sales and adjusted for Ukraine) is at 52.7%, versus 49/9% in Q1 2021. This reflects preparation costs for the integration of LeasePlan.
- A total of 26% of car deliveries were EVs.
Based on its Q1 results, ALD makes the following whole-year forecast:
- The funded fleet will grow between 2% and 4% (unchanged from previous forecast);
- Used-car sales result will be above €2,000 per vehicle (versus previous estimate of €1,000).
With supply chains further disrupted by geopolitical tensions and lockdowns in China, ALD is securing its car supplies by increasing bulk purchases and anticipating orders, leveraging on its strong and long-standing partnerships with OEMs.
“ALD recorded an excellent start to the year, with very strong commercial dynamics, despite continuing supply constraints,” observes Tim Albertsen (pictured), CEO of ALD, who also commented that acquisition of LeasePlan, which is expected to close by the end of the year, “will further reinforce ALD’s positioning and its resilience through the cycle.”
Credit: Fleet Europe