03.03.2015

Hertz up 2%

Hertz Equipment Rentals has issued its full year revenue numbers, which show a rise of two percent, but is still holding back on any 2014 financial results while its ongoing investigation continues.

For the full year world wide revenues were $1.57 billion two percent up on 2013, while net capital expenditure fell almost 19 percent to $433 million.

In the fourth quarter revenues increased three percent to $413 million - five percent excluding currency effects. Rental rates were up one percent on the year, while physical utilisation was up marginally to 67 percent. North America represented $387 million of the $413 million, up four percent on the year, of this the USA represented 80 percent and Canada 20 percent. Utilisation in the region was 68 percent.

Chief executive Brian MacDonald said: "In the second half of 2014, we established business priorities that focused on right-sizing the fleet and increasing the top line by improving sales capacity. By year end, U.S. revenue growth had rebounded, trending slightly above industry levels, and outpaced fleet growth. Unfortunately, at the same time weakening demand in Canada and Europe persisted."

“Of full year 2014 total North America equipment rental revenue, oil and gas represented roughly 25 percent, of which 15 percent was generated from upstream exploration and production activities, where major oil producers are beginning to reduce spending. While we see risk to oil and gas this year, we are managing through the volatility and are moderating our revenue growth forecasts accordingly. We are aggressively working to offset weakness by improving productivity, redeploying equipment, and pursuing growth in the non-residential construction and manufacturing sectors, where low fuel prices are generating opportunities. Other industrial verticals such as power and chemical processing are also areas for growth."

Vertikal Comment

Hertz is lagging behind most of the other large US general rental companies in terms of revenue Growth, particularly in comparison with United Rentals and Sunbelt. The ongoing investigation into the company’s miss-statement of its previous results and the plans for separation foisted on it by Carl Icahn, cannot be helping it to focus on its core business.

The company believes that 2015 will be better and that it still has plenty of scope to increase growth, in spite of the potential fall off in the oil and gas sector.