HERC reports softer demand in second quarter

Hertz said its equipment rental business was seeing "softer demand" with a 1% increase in year-on-year revenues for the second quarter.

The announcement was made ahead of its full quarterly results, which have been delayed because of accounting issues at the company that will see the restatement of its 2012 and 2013 accounts.

Despite the softer demand, Hertz said the HERC business was “ramping up” the recruitment of sales staff in North America because it has not been able to keep pace with demand.

Hertz said revenues had been impacted by a lower level of new equipment and parts sales and by “unfavourable year-over-year mix comparisons in certain industrial verticals [that] have caused a slowdown in revenue growth in the first half of 2014.”

In addition to boosting its equipment rental sales force, Hertz said it was acting to realign the imbalance of its fleet supply and demand, although would continue to invest in new equipment where there were long-term growth opportunities. It expects the HERC business to spend around US$600 million gross this year.

Hertz said work to split off HERC from the main car rental business was continuing, but that the wider accounting issues at the company meant that the split was likely to take place later than the initial target date of the first quarter of 2015.

Progress on the split is being made, said Hertz; “Additional resources have been deployed so this work can be done in parallel with the resolution of the accounting matters.”