ALD’s profit on used cars increases sevenfold
In the first quarter of this year, ALD, a specialist in vehicle rental and professional mobility, earned a record €3,101 on each used car sold. This is seven times more than the same period last year (€439). This phenomenal boost largely explains ALD’s good quarterly results, with a net result of 255.3 million euros, up 64.2% compared to Q1 2021 (155.5 million euros ).
Market disruptions are not all bad. New vehicle delivery delays drive up used vehicle prices, and for leasing companies like ALD, this generates windfall profits. Used car sales generated a total result of 215.2 million euros in the first quarter of 2022, compared to only 38.2 million euros in the first quarter of 2021. Note that the difference here is only d a factor of 5.5; probably due to contract extensions – another consequence of delivery delays – reducing the exodus of old leased vehicles.
Other highlights from ALD’s quarterly report:
- At the end of March, ALD’s financed fleet comprised just under 1.44 million vehicles, up 4.8% compared to the same period last year.
- The 1st quarter leasing and services margin (€329 million, up 4.5% year-on-year) was adjusted for the negative impact of the war in Ukraine (-27 .3 million euros) and the positive revaluation of the fleet (+€ 12.5 million).
- Cost/income ratio (excluding used vehicle sales and restated from Ukraine) was 52.7%, compared to 49/9% in Q1 2021. This reflects the costs of preparing for the integration of LeasePlan .
- A total of 26% of car deliveries were electric vehicles.
Based on its first quarter results, ALD makes the following forecasts for the full year:
- The financed fleet will increase between 2% and 4% (unchanged from previous forecasts);
- The result of used car sales will be more than €2,000 per vehicle (against a previous estimate of €1,000).
With supply chains still disrupted by geopolitical tensions and lockdowns in China, ALD is securing its automotive supplies by increasing wholesale purchases and anticipating orders, building on its strong and longstanding partnerships with OEMs .
“ALD has had an excellent start to the year, with very strong commercial momentum, despite the persistence of supply constraints”, observes Tim Albertsen (illustrated), CEO of ALD, who also said that the acquisition of LeasePlan, which is expected to be completed by the end of the year, “will further strengthen ALD’s positioning and its resilience throughout the cycle”.
Credit: Fleet Europe