Triton International Limited reported results for the second quarter of 2023.
Highlights:
• Net income attributable to common shareholders for the second quarter of 2023 was $128.7 million or $2.34 per diluted share, a decrease of 19.3% from the second quarter of 2022 and a decrease of 4.1% from the first quarter of 2023. Net income for the second quarter of 2023 included $2.6 million of transaction and other merger related costs associated with the pending transaction with Brookfield Infrastructure.
• Adjusted net income for the second quarter of 2023 was $131.3 million or $2.38 per diluted share, a decrease of 18.5% from the second quarter of 2022 and a decrease of 1.7% from the first quarter of 2023. Adjusted return on equity was 21.2% for the three months ended June 30, 2023.
• Utilization averaged 97.0% in the second quarter of 2023 and was 96.6% as of July 25, 2023.
• On April 12, 2023, Triton announced it had entered into a definitive agreement to be acquired by Brookfield Infrastructure (the "Merger Agreement"). Triton has set August 24, 2023 as the date of the special general meeting of shareholders to approve the transaction. Triton expects the transaction will close in the third quarter of 2023.
Operating Performance
"Triton delivered solid results in the second quarter of 2023," commented Brian M. Sondey, Chief Executive Officer of Triton. "We generated $2.38 of Adjusted net income per share and an annualized return on equity of 21.2%. While market conditions in the second quarter remained slow overall, drop-off volumes decreased from the first quarter level and we experienced some pockets of demand. In addition, our revenues and profitability are well protected by our strong long-term lease portfolio. Our utilization averaged 97.0% during the second quarter and currently stands at 96.6%."
Dividends
The Company's Board of Directors has declared a cash dividend payable on September 15, 2023 to holders of record at the close of business on September 8, 2023 on Triton's issued and outstanding preferred shares as follows:
As previously disclosed, Triton’s preference shares will remain outstanding immediately following the closing of the Brookfield Infrastructure transaction, and Triton expects to continue paying normal quarterly dividends on these shares. Post-closing, Triton's preference shares will remain entitled to the same dividends and other preferences and privileges that they currently have, with the preference share dividends remaining an obligation of Triton. Triton expects that the preference shares will continue to be listed on the NYSE immediately following the closing.
Additionally, as permitted by the terms of the Merger Agreement, Triton has declared a quarterly cash dividend of $0.70 per common share, payable on September 22, 2023 to shareholders of record at the close of business on September 8, 2023. The dividend is conditioned upon and will only be payable if the transaction has not closed prior to the close of business on the record date.
Transaction with Brookfield Infrastructure
On April 12, 2023, Triton announced that it had entered into a definitive agreement to be acquired by Brookfield Infrastructure Partners L.P. ("BIP") through its subsidiary Brookfield Infrastructure Corporation ("BIPC") (NYSE: "BIPC") and its institutional partners (collectively, "Brookfield Infrastructure"). Additionally, as previously announced, Triton will hold a special general meeting of shareholders on August 24, 2023 to approve the proposed transaction. The transaction is expected to close in the third quarter of 2023, subject to the satisfaction or waiver of customary closing conditions, including approval by Triton’s shareholders and receipt of clearance from the Committee on Foreign Investment in the United States.
In light of the pending transaction, Triton will not hold an earnings conference call to discuss its second quarter results and Triton will not provide a financial outlook for 2023.