Element Financial Corporation

Element Financial Corporation

February 03, 2016 07:00 ET

Element Increases After-Tax Adjusted EPS Q4-2015 Guidance to $0.35 Per Share

TORONTO, ONTARIO--(Marketwired - Feb. 3, 2016) - Element Financial Corporation (TSX:EFN) today announced that it plans to release its Q4-2015 quarterly and fiscal 2015 year-end financial results on March 2, 2016 after the close of markets. The Company also confirmed that it expects to report after-tax adjusted operating income per share of approximately $0.35 for the three-month period ending December 31, 2015 after taking account of integration benefits and continued effective tax management. Originations are expected to amount to approximately $2.6 billion for the quarter reflecting continued strong volumes from each of the Company's four business verticals.

"We are very pleased with the strong demand for fleet management services and equipment financing from our clients across our business verticals," noted Steven Hudson, Element's Chief Executive Officer. "In particular, the quality of our portfolios remains very strong with arrears at 16 basis points well within the parameters that we have established for each of these lines of business and an improvement over the 20 basis points reported at the end of Q3-2015, added Mr. Hudson."

The Company's $2.3 billion rail portfolio mirrors this strong credit quality and is performing in line with expectations with utilization exceeding 99 percent, average lease terms of five years and investment grade lessees dominating the portfolio. The Company also confirmed that its total exposure to the oil and gas industry is very modest at approximately eight percent of earnings assets with 75 percent of this exposure to investment grade credits.

With respect to its funding capacity, the Company continues to maintain its discipline of matched term liquidity. The Company currently has in excess of $6 billion of committed liquidity which, when combined with repayments, will be more than sufficient to fund the Company's expected growth through 2016 and into 2017. This liquidity is comprised of the Company's three-year senior term facility and its recently completed Chesapeake II ABS securitizations.

"Element is well-positioned and well-capitalized to achieve and fund our growth targets for 2016," noted Mr. Hudson. "With more than 70% of our earning assets denominated in US$, we also have the benefit of an exchange rate that will contribute favourably to our earnings targets for 2016," added Mr. Hudson.

The Company also provided an update on the progress of its plans for the integration of the acquired fleet management business from GE Capital. Based on confirmed savings in cost of funds and procurement agreements, the Company expects annualized integration savings to meet its US$95 million target with more than 60 percent of this amount locked down in renewed funding and procurement agreements.

About Element:

With total assets in excess of $23.5 billion, Element Financial Corporation is one of North America's leading fleet management and equipment finance companies. Element operates across North America in four verticals of the equipment finance market - Fleet Management, Rail Finance, Commercial & Vendor Finance, and Aviation Finance.

This release includes forward-looking statements regarding Element and its business. Such statements are based on the current expectations and views of future events of Element's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements, including, among others, statements regarding the expected financial performance of the Company in future periods and the expected integration savings from its recent fleet management acquisitions. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Element, including risks regarding the equipment finance industry, economic factors, risks related to completion of the proposed purchases of portfolios of finance assets, and many other factors beyond the control of Element. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. A discussion of the material risks and assumptions associated with this outlook can be found in Element's 2014 MD&A, and 2014 Annual Information Form, all of which have been filed on SEDAR and can be accessed at www.sedar.com. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Element undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

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