Rental revenues flat but earnings up at United Rentals
By Helen Wright21 July 2016
US-based United Rentals, the largest rental company in the world, has reported flat to a slight dip in first half rental revenues, but net income increased.
Total revenues for the six months to 30 June, 2016, stood at US$2.73 billion (€2.48 billion), down 0.5% year-on-year. Of this, rental revenues slipped 1% compared to the first half of 2015 to US$2.32 billion (€2.1 billion).
Nevertheless, net income was up 12% year-on-year to US$226 million (€205 million).
United Rentals – which boasts 895 rental locations in 49 US states and 10 Canadian provinces - said adverse currency impacts were to blame for the overall drop in rental revenues for the period. It said it had also seen a 2.6% drop in rental rates, but this had been offset by a 2,8% increase in the volume of equipment on rent.
Rental revenues generated by the company’s Trench Safety and Power & HVAC specialty businesses, combined, increased by 14% year-on-year, primarily on a same store basis, the company said.
Meanwhile, overall time utilisation increased 40 basis points year-on-year in the first half to 65.8%. United Rental said it generated US$249 million (€226 million) from the sale of used equipment during the six months, up 4% year-on-year, while it invested US$473 million (€429 million) in net rental capital expenditure during the period. This compared with US$776 million (€704 million) for the first half of 2015.
CEO Michael Kneeland said, "During our second quarter, we were pleased with the positive progression of monthly rental rates, which we attribute to the combined impact of our internal initiatives and solid growth in several of our core US markets.
“While conditions remain challenging in Canada, we see solid customer activity on both the East and West Coasts of the US, at the same time that our emphasis on specialty rentals continues to pay dividends."
Mr Kneeland said the company expected business to improve both seasonally and cyclically.
“Consequently, we can reaffirm our 2016 revenue, EBITDA, capital spending and free cash flow guidance. While we remain mindful of the elevated uncertainty towards the direction of the global economy, we also know that we have considerable flexibility in operating our business to address changing market dynamics," he said.