Chailease Holding Co Ltd (中租控股), the nation’s top leasing services provider, yesterday said that revenues are expected to peak in the second half of this year, driven by growth in its offshore operations in China and Southeast Asia.
However, the company said that it is not likely to implement capital raising plans in the near term, due to a lack of significant business growth drivers.
“Our capital needs are based on business growth momentum and currently we have not identified an immediate need for additional capital,” Chailease chief operating officer Tiffany Jeng (鄭宇虹) told an investors’ conference.
The company still has some room in leverage utilization to ensure adequate funds for business needs, Jeng said.
“On a consolidated basis, we can leverage up to between 7.5 and 8 times our capital. Our leverage utilization was at 7.1 percent at the end of last month,” Jeng said.
Jeng downplayed concerns over the firm’s China-based exposure and asset quality, saying that the delinquency rates have little correlation with the decline in industrial metals prices across the globe.
“Our portfolio is highly diversified,” Jeng said.
“From the perspective of our plant and equipment leasing-focused business, we have not identified a clear link between commodity prices and delinquency,” she added.
Management is focused on maintaining its financing spreads, as opposed to pricing competition, she said.
In the second quarter, net income rose 18 percent sequentially to NT$1.9 billion (US$60.29 million), while profitability and loan spread maintained 19 percent, the company said.
Earnings per share were NT$1.68.
As of the end of June, the firm’s consolidated loan portfolio grew 13 percent annually to NT$239.66 billion on track to meet this year’s target, it said.
During the second quarter, Taiwan led lending growth with a 20 percent increase to NT$132.92 billion due to rapid expansion in bills financing, while China and Thailand reported each reported a 4 percent increase to NT$71.67 billion and NT$28.69 billion, the company said.
The delinquency ratio in China had improved from 5.5 percent in the January-to-March period to 5.4 percent last quarter, with the delinquency amount dropping from NT$4 billion to NT$3.8 billion, the company added.
However, write-off had expanded from NT$780 million recorded in the first three months of the year to NT$1 billion last quarter.
While the company declined to provide details on its exposure in China, it said that metalworking activities and metal manufacturing topped its industry exposure, representing 8.8 percent of its loan book in the country last year, down from 9.3 percent in 2014.
Shares in Chailease yesterday gained 0.37 percent to NT$53.6 in Taipei trading.
The company is to distribute a cash dividend of NT$3.1 at the end of this month.
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