H&E Equipment Services, the USA-based equipment company, recently released results for the fourth quarter of 2015. Revenues decreased 8.2 percent to $273.2 million versus $297.8 million a year ago, with decreased revenues in the distribution business partially offset by increased revenues in the rental business.
The net income was $12.0 million in the fourth quarter compared to $16.7 million a year ago; 28.2 % down from a year ago.
Rental revenues increased 3.7 % to $115.0 million due to a larger fleet. Average rental rates this quarter increased compared to both a year ago and to last quarter. Average rental rates increased 0.6 % compared to a year ago and improved 0.4 % compared to the third quarter of this year.
The average rental fleet age at 31 December 2015 was 31.4 months, down from 31.7 months at the end of the last year and younger than the current industry average age of 42.4 months.
John Engquist, H&E chief executive officer, said, “Our rental business continues to strengthen, with revenues increasing 3.7 % for the quarter and 9.6 % for the year, and helped offset the weakness in our distribution business, specifically new crane sales. We believe the uncertainty over the direction of the economy will help drive increased rental penetration as our customers believe it is more prudent to rent rather than make large capital purchases.”
Engquist concluded, “In terms of 2016, non-residential construction activity remains strong across our footprint, especially in the Gulf Coast where a significant number of large capital projects remain on schedule to begin over the next several years… At 31.4 months, we continue to utilize the youngest fleet in the industry, which allows us to take a conservative approach to capital spending in 2016.”