Industrial gains push HERC revenues up 13%
By Murray Pollok24 February 2012
Hertz Equipment Rental Co (HERC) reported its fourth consecutive quarter of double digit growth with revenues for the final three months of 2011 up 11.1% to US$317.9 million. Pre-tax profits rose 77% to $62.1 million.
Hertz said the increases were the result of increased volume and pricing - prices for the fourth quarter were 5.7% up year on year - and cost reduction initiatives. It also said industrial growth in North America and increased penetration of rental was helping grow the business.
HERC's revenues for the full year 2011 were up 13% to $1209 million, with pre-tax profits more than doubling to $161.6 million. Of those revenues, 89% ($1076 million) are generated in North America, while the remaining 11% ($133 million) comes from its European, Chinese and Saudi Arabian business.
Mark Frissora, executive chairman and CEO of Hertz Corp, speaking in an analyst conference call, said the HERC business was seeing an "early stage recovery", helped by expansion in onshore oil and gas investment in North America that was creating an "intense demand for infrastructure".
Hertz said it would invest US$600 million gross in its equipment rental fleet this year and "possibly more if non-residential construction recovers faster than expected."
Acquisitions will continue this year, said Hertz, with a "robust" acquisition pipeline in place and one deal likely to be announced within weeks.