Revenues and profits down at Hertz Equipment
By Patrick Hill06 November 2008
Hertz Equipment Rental Corporation's (HERC) worldwide equipment rental revenues in the third quarter fell 6.8% to US$433.1 million (€338 million). Pre-tax profits for the quarter fell 25.7% to $81.1 million (€63.3 million).
Mark P. Frissora, Hertz's chairman and chief executive officer, speaking about the car and equipment rental businesses, said; "The third quarter was difficult for both the macro-economy and our industry; in response, we implemented unprecedented strategic actions to improve both liquidity and customer satisfaction...in September we initiated programs to further reduce employee headcount by approximately 1400 and to close 80 net locations, as we further re-balance the business due to declining volumes in global car and equipment rental market."
Hertz said it could not provide detailed guidance on the outlook for 2009 until market conditions had stabilised, and that the fall in profits at HERC was "primarily attributable to the effects of reduced volume growth and pricing, partially offset by cost management initiatives"It said that it "continued to achieve strong growth in Canada, especially Western Canada where oil industry-related rental activity remains robust. Also, HERC continues to improve diversification into industrial and fragmented sectors of the US equipment rental market."
The book value of its equipment fleet was $2.4 billion (€1.9 billion) at 30 September, a fall of 10.6% from the start of the year.
The US-based company, which operates 350 branches in the US, Canada, France, Spain and China, said it still expected the total business to generate profits and positive cash flow for the full year. It recently raised equipment rental rates in major rental markets.