Results down at Herc Holdings
By Helen Wright11 August 2016
Newly independent US rental company Herc Holdings reported first half revenues of US$746 million (€669 million), down 9.5% year-on-year, and a net loss of US$9.5 million (€8.5 million), compared to income of US$12.3 million (€11 million) for the same six months last year.
Herc, which completed its spin-off from its car rental parent Hertz at the start of July, said first half total revenues declined 3.9% in 2016 compared with 2015, excluding divested operations in France and Spain and the impact of currency translation.
It said the first half was also negatively affected by lower sales of revenue earning equipment and planned changes in low margin new equipment sales programmes, including the elimination of certain equipment dealerships.
Equipment rental revenues in the first half of 2016 were US$636 million (€571 million), compared with US$679 million (€609 million) in the comparable period in 2015. Excluding the divested operations in France and Spain and foreign currency translation, Herc said equipment rental revenues were nearly flat compared to 2015.
The company added that spin-off costs were US$26.9 million (€24.1 million) in the first half of 2016 compared with US$15.7 million (€14.1 million) in 2015, while restructuring charges totalled US$6.1 million (€5.5 million) for the first half.
The company lowered its 2016 guidance range for adjusted EBITDA to between US$520 million (€467 million) and US$560 million (€503 million). Full-year fleet capital expenditure is expected to be between US$375 million (€337 million) and US$400 million (€359 million).
President and CEO Larry Silber said, “In the last twelve months we introduced new sales and incentive programs and new productivity and pricing tools, and began adding ProSolutions and ProContractor equipment to our fleet.
“We expect that these initiatives will continue to gain momentum over time. We will remain focused on our strategic initiatives to improve our fleet and customer mix in order to drive sales growth and improve dollar utilisation going forward.
“We continued to execute our long-term strategy to diversify our fleet and broaden our customer mix while successfully accomplishing our separation from the Hertz car rental business.
“While we are encouraged by these positive developments, we are managing through continuing weak upstream oil and gas markets and lower than projected volume in the second half. Despite these headwinds, we remain confident that our initiatives are creating a strong foundation for our continuing transformation and positioning us well for the long term.”