Record first quarter for Herc
US-based Herc Rentals has issued record first quarter results in terms of both revenues and profit.
Total revenues increased 25 percent to $567.3 million with virtually all of the improvement coming from rental revenues which grew by 31.6 percent, while sales of used equipment from the fleet were almost halved. Pre-tax profit grew by more than 63 percent to $67.1 million, driven by a 4.1 percent improvement in rental rates and higher utilisation.
Capital expenditure in the quarter was $286.8 million, up from $90.9 million this time last year, leaving the average age of the fleet at 48 months. The company has increased the lower level of its full year spending plans by $80 million compared to the start of the year to $900 million while leaving the top end unchanged at $1.12 billion.
Chief executive Larry Silber said: "We continued our 'shift into high gear' with an excellent first quarter. Our average fleet increased 23.4 percent to $4.5 billion, dollar utilisation increased to 41.4 percent, and rental revenue increased 31.6 percent over the prior year. Outstanding execution by our operations and field support team was enhanced by strong demand in our markets and a positive operating environment. The record first quarter results have accelerated our growth expectations for the full year, and we now expect 2022 adjusted EBITDA to increase between approximately 31 and 39 percent over 2021."
"We closed on the previously announced acquisition of Cloverdale Equipment Company earlier this week and are confident we can continue to execute our organic growth strategy that is supplemented with strategic M&A. We raised our guidance for the full year 2022 based on our outlook for continued strong momentum in operating performance."
Overall, a strong start from Herc, with the promise that the pace will pick up further as the year progresses and its latest acquisition comes into the equations. If it can maintain the pace it has set the company should sail past the $2.5 billion level for the full year.
It also encouraging to see that it is stepping up investment in new equipment, although obtaining it might become something of a challenge, given growing lead times from many manufacturers.
A positive start to the first quarter reports.