26.02.2012

Hertz moves into profit

Hertz Equipment Rental has achieved a full year profit on revenues up just over 13 percent.

Full year revenues for the business were $1.21 billion compared to $1.07 billion in 2010. This translated into a pre-tax profit of $69.3 million, compared to a loss in 2010 of $14.6 million.

The trend continued into the fourth quarter, with revenues climbing 11.4 percent to $318 million, with a pre-tax profit of $45.1 million 2.7 times the level achieved in the same quarter last year.

The company, puts the improvement down to a slightly larger fleet, improve utilisation, higher rates and improved operational efficiencies.

Capital expenditure is hard to dig out of the accounts, but appears to have been $466 million gross, with $106.2 million of used sales – giving a net expenditure on the fleet of $359.8 million. This compares to $245 million gross last year and $145 million net.

The group as a whole, reported revenues of $8.3 billion, up from $7.6 billion last year and a pre-tax profit of $324 million, compared to just $14.6 million in 2010.

Chief executive Mark Frissora said: “Our record results for the fourth quarter and full year 2011 are attributable to an equal emphasis on efficiency and revenue growth, which were achieved despite deteriorating macro conditions in Europe. Hertz generated over $450 million of efficiency savings last year, bringing the cumulative five-year total to over $2.1 billion, representing 25 percent of our total cost base. The results of our growth initiatives were record worldwide car rental revenues for full year 2011, on record transaction day growth, and the fourth consecutive quarter of double-digit growth in the equipment rental business.”

“These achievements capped a year where Hertz almost doubled 2010 adjusted pre-tax income and beat the previous, pre-recession record in 2007, on $387.2 million lower revenues. We also refinanced almost $7 billion of debt on favourable terms last year, further strengthening our balance sheet. A continued emphasis on technology-driven efficiencies and customer service initiatives, the advancement of an asset-light business model, and a rich mixture of car and equipment rental growth initiatives, are the recipe for sustained financial improvement in 2012 and beyond.”