H&E Equipment Services ‘positive’ at half-year

H&E Equipment Services said its outlook for 2015 ‘remains positive’ after increased fleet investment led to a rise in rental revenues of close to 10% in the second quarter despite some unexpected adverse market conditions.

Income from rental in the three months to 30 June was $108.8 million (€99 million), compared to $98.8 million (€90 million) for the same period in 2014.

The results also showed that the original cost of the company’s rental fleet was $1.3 billion (€1.18 billion), an increase of $163 million (€148 million) year-on-year and $38 million (€35 million) higher than at the end of 2014.

At the same time, H&E said its average fleet age fell to 32.3 months, down 0.2 months during the year and more than 10 months lower than the industry average of 42.4.

John Engquist, H&E Equipment Services’ chief executive officer, said: “The extreme rainfall and subsequent flooding that occurred in May throughout the central United States had a significant impact on our operations as construction activity slowed significantly for nearly a month in many of our regions.

“Despite this unanticipated challenge and ongoing softness in the oil patch, rental revenues increased nearly 10% from a year ago. Most market indicators remain positive and we believe the recovery in the commercial construction markets will continue to accelerate throughout the remainder of this year and into 2016.

“Activity in June picked up significantly and this momentum has continued into July. Increased commercial construction activity in other markets continues to offset the demand declines related to oil and gas. Overall, we are pleased with the trends in our rental business and overall momentum in the commercial construction markets as we head into the second half of this year.”

Mr Engquist concluded: “Due to the unusually wet spring and ongoing softness in the oil and gas markets and the resulting delayed seasonal ramp, we are adjusting our annual guidance announced in our first quarter earnings release. For 2015, we now expect our revenues to range from $1.030 billion (€938 million) to $1.052 billion (€958 million) and EBITDA to be in the range of $319 million (€291 million) to $335 million (€305 million).”