RSC says momentum starting to build
23 July 2010
RSC Equipment Rental reported total revenues down 8% to US$301 million year on year for the three months to 30 June, with rental revenues falling by just 4% to $260 million. RSC made a net loss of $22 million in the quarter.
Rental rates increased from the first quarter of 2010, but were below the second quarter of 2009 by 8.4% However, RSAC said it had achieved strong growth in fleet on rent, increasing by 12% in the quarter and up 35% since the start of the year.
RSC said that the industrial market improved on a year-over-year basis and that it expected this trend to continue, while the non-residential construction market continued to decline slightly in the second quarter and it expected a slight decline in the third quarter. It said it expected pricing to remain challenging in the third quarter.
Erik Olsson, president and chief executive officer, said; "We are seeing 2010 play out in the way we expected, with the positive momentum from the first quarter continuing and strengthening throughout the second quarter."
He added that the growth momentum of the second quarter "has carried over into the third quarter. Market demand is improving each month and we expect improved year-over-year comparisons to continue in the third quarter."
The company has been increasing its fleet investment, spending $102 million gross during the quarter on new fleet "in response to growing demand for select categories." The company sold $64 million of fleet (original cost) during the quarter and achieved margins of 15% on the sales.