Mixed results for United
United Rentals has reported record first half revenues, but profits were marginally lower.
Total revenues for the six months to the end of June were almost 22 percent higher at $4.4 billion, thanks in part to acquisitions, including Blueline and Baker corp, as well as organic growth. Improvements were seen across all types, including used and new equipment sales, rental and services. However pre-tax profits slipped by more than three percent to $571 million, mostly due to the early redemption of debt in the second quarter of $32 million.
In the second quarter revenues were 21.2 percent higher at $2.29 billion, while pre-tax profits slipped two percent to $351 million. Utilisation fell from 69.2 percent to 66.5 percent due principally to the incorporation of acquisitions. Rental rates in the quarter improved 1.89 percent. Capital expenditure on new machines for the rental fleet was more than five percent lower at $1.13 billion for the six months and almost eight percent for the quarter to €872 million. The company has also cut its full year investment forecasts by around $100 million.
During the quarter the company has reduced net debt by $84 million and is on track with its share buyback programme.
Chief executive Matthew Flannery said: "We were pleased with our solid growth in revenue for both our general rental and specialty segments and our adjusted EBITDA for the second quarter. Importantly, the market outlook for the second half of 2019 remains positive based on feedback from our customers and the field. The multiple integrations we have underway will continue to gain traction in the back part of the year."
"Our updates to guidance reflect a slightly slower than expected pace for the BlueLine integration, as well as historically bad weather in several key regions this past quarter. As a result, we've trimmed the upper ends on total revenue and adjusted EBITDA by approximately one percent, and capex by $150 million, while raising our free cash flow expectation. We remain confident in the health of the cycle and are well positioned to serve our customers with the strongest service offering in our history."