07.11.2016

Negative quarter for H&E

US based sales and rental company H&E Equipment has reported lower third quarter revenues and profits.

For the nine months to the end of September total revenues were over four percent lower at $733.8 million, due to lower sales of both new and used equipment, as well as replacement parts. Rental revenues improved marginally – just under one percent to $330 million. Pre-tax profits slipped almost 24 percent to $42.2 million.

Looking at the third quarter revenues were down 11.6 percent with flat rental revenues offset bay a 32.7 percent fall in new equipment sales and 29 percent lower used equipment revenues. Rental utilisation dropped from 73.7 to 72.1 percent while rental rates dropped 0.7 percent. The company says that business has picked up in the fourth quarter especially for aerial lifts. The average age of the rental fleet at the end of September was 31 months.

Chief executive John Engquist said: “Weather had an impact on our operations as Louisiana experienced a ‘1,000 year’ flooding event in mid-August. Our business incurred a short pause as construction projects were temporarily delayed but has since recovered. Our rental business generated revenues of $118.5 million, up 9.1% sequentially over last quarter and margins were strong at 49.5%. Solid demand for aerial work platforms and earth moving equipment resulted in strong utilisation, at 72.1 percent based on OEC. Rental rates decreased 0.7 percent from a year ago but increased one percent sequentially over last quarter.”

“As we expected, our distribution business remained soft during the quarter as new equipment sales continued to be pressured by very low crane demand. When the energy markets rebound on a sustained basis, we believe there will be substantial pent up demand for cranes. We continue to believe that the non-residential construction markets remain healthy based on current bidding activity levels, solid backlogs, positive customer sentiment and the robust activity associated with ongoing large projects.”