Neff trims full year forecast after solid third quarter

Miami, USA-based Neff Corp posted a 6.1% increase in third quarter revenues to US$105.5 million. Net profits for the three months to 30 September decreased slightly to $2.9 million compared to $3.2 million in the same quarter of 2015.

The company has trimmed slightly its revenue forecast for the year from the previous announced $390-410 million range to $390-400 million.

It has seen oil and gas related revenues fall year-on-year by 6.3% in the quarter, but Graham Hood, Neff's CEO, said the company was seeing strong construction activity and that he remained optimistic about business conditions.

Oil and gas is an important end market at six of its 68 rental locations, and overall the sector represents around 7% of Neff’s business.

The company reported that time utilization of its fleet decreased very slightly from 69.2% to 69.0%, while rental rates were down 0.2% year-on-year.

Mr Hood said; “The third quarter of 2016 was another solid quarter for Neff's rental business as we generated record third quarter results for rental revenues, which increased by 5.8% year-over-year.

“This performance reflects our ability to execute our strategy and take advantage of the ongoing strength in the construction markets we serve. We expect this strength to continue for the remainder of 2016 and into 2017."

Neff’s focus is on the southern states of the US, and almost 54% of its fleet comprises earthmoving equipment. Aerial platforms represent around 11% of the company's fleet by original acquisition cost.