HERC revenues fall 20.8% in final quarter of 2008

24 February 2009

Hertz Equipment Rental Co (HERC) revenues fell by 20.8% to US$370.7 million in the final quarter of 2008 (a 16.7% fall in constant currency) and pre-tax profits of US$46.0 million were 55% lower than the same quarter in 2007.

The only market where volumes grew was in Canada, where the oil sands related business in western Canada remained "relatively robust, although the rate of growth has slowed".

HERC said the lower profits were the result of reduced pricing and volume growth, which were partially offset by cost reduction initiatives. Revenues from worldwide equipment rental for the year were $1.66 billion, down 5.6% compared to 2007.

Hertz said that continued volatility in car and equipment rental markets - and volume, pricing and residual value falls attributable to the global recession - meant that it could still not offer any quarterly or full-year 2009 guidance.

Mark P Frissora, Hertz chairman and chief executive officer, said, "Hertz experienced unprecedented volume, pricing and residual value contraction across all of its businesses in the fourth quarter of 2008. Nevertheless, we generated almost $117 million of Corporate EBITDA.

"Although there was an adjusted pre-tax loss for the quarter, we made significant progress towards achieving our objective of right-sizing the business to economic conditions", said Mr Frissora. He added that the company aimed to reduce an additional $350 million of costs in 2009.

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