United Rentals makes loss and plans more depot closures

05 May 2009

United Rentals made a net loss of US$19 million in the first three months of the year with total revenues of $594 down 23% on the same period in 2008. The company shed 500 staff during the quarter, closed 10 depots and said a further 39 would be shut during the second quarter of the year.

Michael Kneeland, chief executive officer of United Rentals, said, "Weak construction markets and intense pressure on rates constrained both our top line and our gross margin throughout the first quarter. While the decline has yet to run its course, there are many actions we are taking to mitigate its impact.

"We took another $21 million of SG&A [selling, general and administrative] expense out of the business in the quarter, further reduced our headcount by 5%, closed or consolidated 10 of our least profitable branches, continued to defleet, and accelerated our pursuit of National Account customers. We plan to close an additional 39 branches in the second quarter, further evidence of the levers at our disposal."

The company has already closed 75 locations and now has a network of approximately 615 depots in the US, Canada and Mexico.

United said that time utilisation decreased by 2.4% to 56.1%, and rental rates fell 11.5%, compared with the first quarter last year.

The May issue of International Rental News contains an exclusive interview with Mr Kneeland.

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