28.01.2013

United up 12.5%

United Rentals has announced its full year results for 2012, they show that the merged business – RSC and United – saw total revenues (including RSC/s first quarter) rise over 12.5 percent to $4.66 billion. The actual reported revenue –excluding RSC’s first quarter was $4.1 billion of which rental revenues were $3.5 billion.

Pre-tax profit however almost halved to $88 million largely due to integration costs.

Looking at the fourth quarter revenues were $1.25 billion with a pre-tax profit of $39 million compared to $56 million last year.

Rental rates for the year were 6.9 percent up on a year ago with utilisation falling marginally to 67.3 percent. In the fourth quarter rates were up six percent while utilisation climbed almost one percent to 68.7 percent.

Capital expenditure for the year was $1.37 billion compared to $810 million last year, sales of used machines form the fleet were $463 million compared to $363 million for 2011. The average age of the fleet was reduced from 50.3 to 47.2 months.

Chief executive Michael Kneeland said: "Our strong performance in 2012 continued in the fourth quarter as we delivered solid growth, robust margins and exceptional flow-through from our revenue streams. The integration with RSC has been very successful, and while it's not complete, we can now shift our focus to driving improvements across the entire business. Despite the intensity of integration, we’ve paid consistent attention to the fundamentals of our business and made good on our promise to drive significant returns."

"There's a lot to be excited about from the standpoint of value creation as we look at 2013. Industrial and other non-construction sectors have balanced our mix and now account for about 50% of our business. We also expect to benefit further from the secular shift to rental. And non-residential construction is predicted to show reasonable improvement, with larger upswings in 2014 and 2015. We see opportunities to continue to grow our key accounts, reap the synergies of the merger and expand our fleet, while further lowering our debt leverage."

Vertikal Comment

Comparing the results with last year is quite tricky and confusing, the
acquisition was completed in April 2012. The acquisition has clearly dented profits, but given the savings already achieved and those expected to flow through this year the deal looks as though it could work out better than some of us cynics anticipated.

United appears to have made good progress in what is a massive undertaking. It looks like achieving around $5 billion in revenues for 2013 – the key factor though will be how much profit it manages to generate.

Watch this space.