Both the revenues and profits of H&E Equipment Services were significantly negatively impacted by the Covid-19 pandemic in the second quarter of 2020. While there are signs of improvement, the economic headwinds are expected to continue for the full year.
Revenues dropped by 16.6% to $278.3 million, compared to $333.6 million in the same period of the previous year.
This decline was attributed primarily to a 19%, or $36.5 million, fall in total rental revenues.
The US-based company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) decreased by 19.3% to $95.3 million in the second quarter, yielding a margin of 34.2% of revenues compared to 35.4% in the previous year.
Brad Barber, CEO and President of H&E, said, “As a result of the Covid-19 outbreak and subsequent economic slowdown, the second quarter was a challenging period for our business.
“Work continued in our end-user markets while some projects were paused, delayed or cancelled.
“As we expected, demand for rental equipment declined, which pressured rates, physical utilisation and ultimately rental revenue.”
Average time utilisation was 59.5%, compared to 71.2% in the second quarter of 2019.
Utilisation reached its lowest point in April and has since improved and stabilised.
Average rental rates were down 2.8% on the previous year.
Barber said, “Recently, there are some encouraging trends compared to the second quarter; however, we believe the headwinds related to Covid-19 will persist throughout the balance of this year.
“There is still tremendous uncertainty regarding the cadence of the economic recovery, including the outlook for the non-residential construction markets.
“We are working very hard to generate returns for our shareholders in the current environment and I am very pleased with how our team has responded to these significant marketplace challenges.”