30.10.2024

Solid quarter for Herc

US rental company Herc Rentals has reported solid third quarter rental revenue growth maintaining its momentum into the fourth quarter.

YTD

Total revenues for the nine months to the end of September increased almost seven percent to $2.62 billion. The growth was generated by the rental activity which increased 11 percent to $2.35 billion, thanks to a 3.5 percent increase in rental rates plus more than eight percent in volume. The company also completed eight acquisitions with a total of 26 locations and opened 16 new greenfield locations.

Pre-tax profit for the period improved three percent on last year to $334 million.
Capex Capital expenditure over the nine months was $ 753 million almost 31 percent below the amount spent in the same period last year, although sales of used equipment from the flet were slightly lower too. As a result, the average age of the fleet increased from 45 to 46 45 months, following a substantial reduction this time last year.

Net Debt at the end of the period was $4.0 billion just over 11 percent higher than at this point last year.

Third Quarter

Total revenues were just over six percent higher at $965 million
Pre-Tax Profit improved 10 percent to $160 million

Chief executive Larry Silber said: “In the third quarter, we significantly outpaced overall industry growth on both a total rental revenue basis and from an organic revenue perspective. By capitalising on our broad end-market coverage, diversified product and services offering and expanding share in resilient urban markets, we continue to deliver strong volume and a solid price/mix performance.”

“We increased third quarter rental revenue by 13 percent to a new quarterly record, primarily reflecting the continued robust growth from mega projects and contributions from our increased branch network and recent acquisitions. This growth was achieved despite a tough year-over-year comparison and a challenging interest rate environment for local project starts.”

“As we manage the complexities of disparate levels of demand across geographies, end markets and project types, our team is agile and remains focused on aligning costs and balancing fleet, while continuing to support the growth of our business and deliver outstanding customer service.”

Vertikal Comment

This is an excellent result from Herc, although it continues to carry a large debt load it appears to be using the money wisely maintaining solid growth through small strategic acquisitions and organic growth. With interest rates likely to start coming down it looks well set to continue on a positive trajectory. Although the fleet is still a little long in the tooth for this period in the economic cycle.

The company looks to be in good shape though for 2025.