04.05.2022

Record first quarter for United

US rental company United Rentals has reported a record first quarter in terms of revenues and profitability.

Total revenues came in at $2.52 billion, up almost 23 percent on the same quarter last year, most of this was due to more than 30 percent increase in rental revenues while sales of used equipment from the fleet dropped back and other revenues showed only modest growth. Pre tax profits jumped by more than 75 percent to $483 million.

Capital expenditure on new equipment for the rental fleet was $460 million but spending is set to grow throughout the rest of the year, with a full year capital expenditure now forecast in the region of $2.9 to $3.1 billion. The full year revenue projections have been raised to around $11.1 billion.

Chief executive Matthew Flannery said: “We're very pleased with our strong start to 2022, which delivered a number of first quarter records, including total revenue, rental revenue, adjusted EBITDA and EPS. The momentum we carried into the year accelerated quickly, and our markets are continuing to trend up. The most significant tailwind is the broad-based rental demand we’re seeing in our construction and industrial verticals as we approach our busy season.”

“We’ve updated our full-year guidance with higher targets for total revenue, adjusted EBITDA and free cash flow, supported by customer sentiment and robust project activity. Based on our visibility into the year, as well as leading industry indicators, we remain confident in our ability to leverage the current upcycle and adapt to any operating conditions.”

Vertikal Comment

This a stellar all round performance from United, which appears to have more than regained its mojo after the impact of the pandemic. The fleet now is such a size it needs to be spending at the levels proposed both to maintain or reduce the average age of the fleet, but also to expand the business. Whether manufacturers can keep pace, given the supply chain constraints is another thing, and this could prove to be a bit of a brake on its plans.

But no matter how you look at it, this is a great result which has generate a great deal of cash which in turn is allowing the company to reduce its net debt and ramp up its stock buy-back programme bosting shareholder value and returns.