Global fleet and supply chain solutions player Ryder saw operating profits jump 75% y-o-y to $1.216bn in the full year 2022. Revenue increased by 24% to $12bn.
Across its divisions, Fleet Management Solutions (FMS) saw operating income increase by 59%. The company put this down to the spike in used vehicle sales prices in 2022, as well as tight trucking capacity across global supply chains.
In the first quarter of 2022, Ryder announced that it was to pull out of FMS operations in the UK. As of now, more than 90% of its revenue earning equipment and operating property has been sold off, generating $400m in added income. Ryder Chief Executive Robert Sanchez said of this move, that the company is redeploying its proceeds to higher return opportunities.
Sanchez continued, “We accelerated growth in Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS), both organically and through strategic, accretive acquisitions.” The SCS division acquired two related companies, Midwest and Whiplash, and generated organic revenue growth of 22% on top of that.
Meanwhile, DTS saw operating income grow by 108% in the full year, which the CEO put down to his team successfully implementing pricing actions.
Though 2022 was a bumper year for Ryder, Chief Financial Officer John Diez warned that 2023 may not achieve such great growth. He said, “In 2023, we expect strong but reduced earnings as a slowing macroeconomic and freight environment drive lower results in used vehicle sales and rental. We expect these headwinds to be partially offset by continued earnings momentum in supply chain.”
Ryder benefitted from high used vehicle sales prices that were brought about by tightened availability of new vehicles due to semiconductor shortages. As vehicle manufacturers have tackled such bottlenecks, more new vehicles will be available in 2023 and this is already hitting used vehicle prices. As Diez said, the company will feel this in the coming months in the form of reduced revenues.
Moving forward, Ryder is engaging in a share buyback programme, where it plans to take back 2.0m shares in the next two years. According to the supply chain and fleet management company, this “is designed to provide management with capital structure flexibility while concurrently managing objectives related to target balance sheet leverage, acquisition opportunities, and shareholder returns.”