In fourth quarter 2013, PHH Arval’s Fleet Management Services segment profit was $22 million, up $2 million from fourth quarter 2012. For all of 2013, Fleet Management Services segment profit was $88 million, up from $87 million in 2012. Fleet Management Services includes fleet leasing and fleet management.
PHH Arval’s segment profit growth was primarily due to growth in revenue from truck lease syndications and dealerships as well as lower interest expense because the average cost of borrowing declined. Segment profit growth was partially offset by higher cost of goods sold from truck lease syndications and higher operating expenses to support volume growth.
Last week’s announcement comes five months after Orange Capital purchased 5% of PHH’s outstanding shares. Orange Capital wrote a letter to Glen A. Messina, president and CEO of PHH Corporation, recommending this current step of hiring advisers to consider to assist in separation or sale, among other possibilities. Apparently, Orange Capital got the positive response it was seeking, and last month, it increased its holdings of outstanding shares to 6%.
“Our decision to explore a separation or sale of our businesses reflects our determination to maximize shareholder value” said Messina. “We appreciate the constructive input we have received from Orange Capital and our other shareholders in this regard.”
Mike Sheldrick, Senior Editor, Fleet Management Weekly
