United Rentals positive on 2014 outlook

By Murray Pollok23 January 2014

United Rentals is forecasting revenue growth of between 12.5% and 17% this year on the basis that the bulk of the recovery in non-residential construction has still to come and that the rental sector is at the early stages of a multi-year growth cycle.

The company – the world’s largest equipment rental firm – posted a 6.2% increase in revenues for 2013 to US$4.66 billion (compared to combined revenues for United and RSC in 2012). Net profits for the year were $387 million, up from $75 million in 2012.

Fourth quarter revenues rose 7.1% to $1.34 billion, with net profits of $140 million, up from $41 million in 2012.

The revenue increases result from a 6.9% rise in the volume of equipment on rent and a 4.2% average increase on rental rates. United invested $1.58 billion gross on its fleet in 2013 and said it will increase that to $1.65 billion this year.

Michael Kneeland, chief executive officer of United Rentals, said 2013 had been a year of “unparalleled achievement”, with record revenues, EBITDA, EBITDA margin and earnings per share.

He said the integration with RSC had been a success, with RSC-related costs synergies amounting to $236 million for the full year; “We also generated $421 million of operational free cash flow, while continuing to grow our fleet in an improving marketplace. We ended on a strong note, with year-over-year increases in rate and time utilisation, positioning us well for 2014.”

United expects to grow this year through higher rental rates and an increase in demand from end markets. “We agree with industry forecasts that the bulk of the recovery in non-residential construction lies ahead, and equipment rental is still in the early stages of a multi-year growth cycle”, said Mr Kneeland.

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