A 3.8% rise in Herc Rentals’ equipment rental revenues to US$407.6 million in the second quarter of 2019 compared to the same period in the previous year has been attributed to lower net fleet capital expenditure and a 4.6% pricing improvement – the 13th consecutive quarter of year-over-year pricing improvement.
Larry Silber, president and CEO of Herc Rentals, said, “Our strong second quarter results reflect the company-wide focus on quality of earn. Lower net fleet capital expenditures and increased pricing improved dollar utilization. These initiatives drove equipment revenue growth and strong profitability improvements despite record levels of rain in certain regions of the US.”
This partially offset the year-on-year decline in total revenues from $485.5 million to $475.1 million, which was primarily due to a $26.9 million reduction in sales of rental equipment compared to 2018.
Net income was up $10 million from the net loss of $300,000 previously, bringing net income to $9.7 million. Meanwhile, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) grew 14.9% to $174.9 million.
Looking at the whole first half of the year, equipment rental revenue increased by 3.1% or $23.6 million to $785.2 million compared to $761.6 million in the first half of 2018. Strong improvement in pricing and mix were primarily offset by strategic reductions in re-rent revenue.
Gross fleet capital expenditure for the first half of 2019 came to $257.1 million, and disposals were $123.7 million.
Looking ahead, Silber said, “Customer feedback and project backlogs support our expectation for solid equipment rental demand for the rest of the year. As we continue to successfully implement our revenue and cost initiatives, we expect to continue generating strong growth in profitability for the full-year 2019.”
Net fleet capital expenditure is expected to be between $370 and $410 million, and year-on-year adjusted EBITDA is forecast to be between 7 and 11%.