23.01.2014

Profits soar at United Rentals

United Rental has posted its full year results which show a an almost seven fold jump in pre-tax profits

Total revenue for the year was $4.95 billion an increase of 6.2% percent on 2012, while pre-tax profits jumped almost seven fold from $88 million in 2012 – due to high integrations costs for the RSC merger – to $605 million this year. The substantial boost is due to an easy comparative, reduced costs, higher utilisation at 68.2 percent for the year and a 4.2 percent increase in rental rates. Capital expenditure on rental equipment was $1.58 billion, up from $1.27 million in 2012.

Looking at the fourth quarter, the upward trend continued with total revenues up 7.5 percent to $1.34 billion. Pre-tax profits increased almost six fold, from $39 million last year to $226 million for 2013. Utilisation was up to 69.3 percent while rental rates increased four percent.

The company is forecasting another year of six to 10 percent growth with revenues expected to hit between $5.25 to $5.45 billion.

Chief executive Michael Kneeland said: “2013 was a year of unparalleled achievement for our company, both operationally and in terms of value creation. We reported record results for full year revenue, EBITDA, EBITDA margin and EPS, due to the disciplined execution of our strategy and our successful integration of RSC. We also generated $421 million of operational free cash flow, while continuing to grow our fleet in an improving marketplace. We ended on a strong note, with year-over-year increases in rate and time utilization, positioning us well for 2014."

“This year, we will continue to implement our strategy to profitably grow the business, drive down leverage and return cash to shareholders. We expect our growth to be supported by higher rental rates, free cash flow generation and an increase in demand from our end markets. We agree with industry forecasts that the bulk of the recovery in non-residential construction lies ahead, and equipment rental is still in the early stages of a multi-year growth cycle.”