Solid growth in construction-driven end markets has fuelled a strong year for US-based rental company Neff Corp.
Revenues increased 3.2% year-on-year in 2015 to US$384 million (€349 million), of which rental revenues were up 11% to US$336 million (€305 million). Neff said rental rates were up 1% in 2015, while utilisation stood at 66.8%, compared to 69.7% in 2014.
It said the average original equipment (OEC) cost of its rental fleet increased 10.6% to US$762 million (€692 million) in 2015. At December 31, 2015, the OEC of the company’s rental fleet was US$766 million (€695 million), up 8.7% when compared to 2014.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were stable year-on-year at US$186 million (€169 million).
CEO Graham Hood said, “We generated good results in 2015 with record rental revenues and adjusted EBITDA, despite the challenges from the decline in upstream oil and gas demand. During 2015, we experienced solid growth in our core construction driven end-markets and anticipate further growth in these markets in 2016.
“Outside of our branches directly affected by oil and gas, our rental revenues were up by 12.7% and our EBITDA was up by 11.4%, for the fourth quarter of 2015 compared to prior year. Our approach for 2016 is to be cautious with our CAPEX spending and to focus on rental demand in our construction end-markets."
For this year, NEFF said total revenues were forecast to be in the range of US$390 million (€354 million) to US$410 million (€372 million). Adjusted EBITDA was forecast to be in a range of US$190 million (€172 million) to US$200 million (€182 million).
It added that the year-on-year rental rate increase for 2016 was expected to be approximately 0% to 2%, while utilisation was forecast to stand at around 68%.
And Neff said this year’s net capital expenditure was expected to be in the range of US$100 million (€91 million) to US$110 million (€100 million).
Mr Hood said, "We have made significant investments in our business over the past couple of years as we strive to create shareholder value. We believe the multiyear expansion for our industry will continue and we are especially encouraged by the opportunity for our earthmoving fleet to gain market share as more customers are making the decision to rent versus own.
“We expect to see a decreasing impact from the slow-down in our oil and gas markets and we believe that our diverse end-markets and our focus on high growth geographies will enable us to execute and deliver another year of solid growth in 2016."