25.04.2011

RSC UP 25%

US rental company RSC has reported first quarter revenues up 25 percent but high interest and debt restructuring costs translate this into an $80 million loss.

Revenues for the quarter were $326.9 million up 25 percent on the same quarter last year, with rental revenues of $271.7 million, 22.3 percent higher than this time last year.

The company increased its pre-tax loss though from $60.9 last year to $80.5 million this quarter. At the operating income line RSC made $16.4 million, but interest expense doubled to $82 million while early retirement of its existing debt cost it $15.3 million – The company refinanced its $1.7 billion of primary debt.

The company says that rental rates increased by two percent in the quarter, while utilisation was 64 percent, compared to 55 percent a year ago. During the period it spent $158 million on new equipment and sold $90 million of older equipment off.

Chief executive Erik Olsson said: "We produced another quarter of exceptional volume growth of 20 percent and generated positive year-over-year pricing of two percent, including a 3.8 percent year-over-year improvement in March. These results drove a 50 percent year-over-year increase in EBITDA and demonstrate the continued and increasing acceptance of our leading value proposition by both industrial and non-residential construction customers.”

“Our strategy of making consistent investments in our footprint, people, technology and sales organisation throughout the downturn has positioned us to outpace the growth of our end markets as we enter the expansion phase of the business cycle."

"We see continued strengthening in the industrial markets and are benefiting from increasing customer focus on the total cost of rental and not strictly pricing. customers are embracing the value of our total rental solution approach including our Total Control(R) system. In addition, improved results were widespread with all regions delivering double digit revenue growth. As a result, we expect continued favourable year-over-year comparisons in the second quarter and remain optimistic that these positive trends will continue throughout the year."