Rental rates push revenue up at Essex

By Sarah Ann McCay19 August 2012

Increased demand for crawler, rough terrain and heavy tower cranes in the second quarter of 2012 has pushed revenue and gross profit up for Essex Rental Corp.

The North American company reported total revenue of US$ 27.2 million for the three months ended June 30, 2012, a 21.7% increase from US$ 22.3 million for Q2, 2011.

Gross profit for the period jumped 86.2% to US$ 5.3 million compared to US$2.9 million for the same period last year. Gross profit margin increased by about 6.8% to 19.6% for the three months.

These increases were driven by increased demand in crane rental agreements. Average monthly crawler crane rental rates increased by US$ 808 to $17,041 on a sequential quarterly basis, putting average monthly crawler crane rental rates at their highest level since the first quarter of 2010.

Use of crawler cranes increased to 39.4% in the second quarter of 2012, while rough terrain crane usage achieved 67.6% for the period. Utilization of heavy tower cranes and elevator lifts increased to 55.1% in the quarter.

In total, equipment rentals segment revenues were US$ 21.6 million for the three months ended June 30, 2012 versus US$ 14.6 million for the three months ended June 30, 2011.

Looking ahead, Ron Schad, President and CEO of Essex expects rental demand to remain high, particularly from infrastructure and maintenance related energy projects.

"The expected duration of new crawler crane orders year to date through July has increased 15.5% compared to the prior year's orders. The increased average crawler crane lease duration is providing greater visibility, and if this trend continues, is likely to have a positive impact on utilization for the remainder of 2012 and 2013," Mr Schad said.

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