Double-digit Q2 and H1 rises for Essex
By Alex Dahm14 August 2008
Rental revenue at US crane rental house Essex Crane Rental Corp. was up 34.6% to US$15.8 million for the second quarter of 2008 from $11.7 million in the second quarter of 2007.
Total revenue, including revenue from rentals, repair and maintenance, and transportation services (but excluding used rental equipment sales), rose 28.7% to $20.2 million from $15.7 million in the second quarter of 2007.
The increase in rental revenue was attributed to an increase in utilisation and rental rates. The average monthly revenue rate in Q2 2008 increased 35.7% to $21,303 from $15,694 for the same quarter in 2007.
As a result of the strong revenue growth and expense control, rental EBITDA, excluding a $650,000 one-off charge, increased by 40.2% to $11.0 million from $7.8 million in the second quarter of 2007.
For the first half of 2008, total revenue, which included revenue from rentals, repair and maintenance, and transportation services (but excluded used rental equipment sales), increased 23.8% to $37.4 million from $30.2 million in the first half of 2007. The increase was primarily driven by a 32.1% increase in rental revenue to $29.7 million from $22.5 million for the comparable period in 2007.
Total cost of revenues (excluding costs associated with used rental equipment sales) was $16.0 million for the six months ended 30 June 2008 compared to $15.2 million in the six months ended 30 June 2007.
Rental EBITDA excluding the one-off $650,000 charge increased 41.6% to $20.2 million for the six months ended June 2008 from $14.3 million for the same period 2007.
Laurence Levy, Hyde Park chairman and CEO, commented, "During the second quarter, Essex continued to execute on its strategy of selling lower lifting capacity, older cranes and redeploying its capital into higher monthly average rental rate, higher lifting capacity equipment, which has also historically produced higher utilisation rates. For the first half of 2008, the company has sold 15 cranes to either overseas concerns or domestic fixed operators. Importantly, the relationship between the sales price of this equipment and the orderly liquidation value of the assets has exceeded the company's historic experience. Concurrent with these sales, the company has taken delivery of $15.9 million of new equipment in 2008. This investment has begun to benefit revenues and profitability and we expect this to continue for the remainder of 2008 and beyond."
Essex Crane Rental Corp, a subsidiary of Essex Holdings LLC, was acquired by Hyde Park Acquisition Corp in March 2008 for $210 million.