16.11.2008

Ahern up 20%

Ahern Rentals, the Las Vegas based aerial lift and telehandler rental company, has reported nine month revenues of $293 million, an increase of almost 20 percent. Pre-tax profits slipped from $13.2 million last year to $9.5 million this year, a fall of 28 percent.

The third quarter saw revenues rise by 11 percent to $101 million while pre tax profits dipped 26 percent to $4.7 million

Ahern Rentals, Las Vegas, last week reported an increase of 13 percent in equipment rentals and related revenues for the third quarter 2008 to $89 million.

Like-for –Like/same branch revenues in the quarter were up 12 percent while three new branches that have opened during the year added an extra $1.5 million to the third quarter revenues.

The additional rental income also came from the fact that the company substantially increased the size of its fleet during the past year.

Capital expenditure on rental equipment to the end of September was $119 million, down from $162 million during the first nine months of 2007.

The original cost of the rental fleet grew from $613 million to $783 million, this resulted in the extra revenue, but also a drop in financial utilisation from 48 percent to 44 percent. Physical utilisation dropped two percent to 70 percent, but rates declined by five percent during the period.


In terms of the breakdown in nine month revenues, rental was up just under 19 percent to $251 million, while Sales of used equipment from the rental fleet dropped 17 percent and new equipment sales surprisingly increased by 90 percent to over $25 million thanks to the benefits of a sales manager, appointed in 2007 beginning to bear fruit.

Vertikal Comment

While Ahern reports along the lines of a public company, due to the way it is funded, it is managed like a private one. As such it had been expanding in the face of the looming slow down, opening new locations and adding to its fleet.

The result is of course the fall in profitability and greater indebtedness, although much of this has been offset by lower interest rates.

Owner Don Ahern and his team are well tuned into their market and with a far more specialised fleet than the likes of United, RSC, NES or Hertz could be well placed to seize on the opportunities that are likely to arise through the challenges that 2009 is likely to throw at them.