26.10.2023

United flies high

US rental company United Rentals has recorded another step rise in revenues, exceeding more than $10 billion in revenues over the past nine months.

YTD
Total revenues for the nine months to the end of September were $10.6 billon an increase of 27 percent over the same period in 2022. All parts of the business contributed to the increase, although the greatest increase came from sales of used equipment from the rental fleet which more than doubled to $1.1 billion. Pre-tax profits for the period improved 21 percent to $2.31 billion.

Third Quarter
Third quarter revenues increased by a slightly more modest 17 percent to $3.76 billion, with pre-tax profits lagging slightly at $943 million- a rise of 15.5 percent.

Capex
Capital expenditure on rental equipment increased 25 percent on the same period last year to $3.08 billion. The average age of the rental fleet declined to 51.6 months.

Full year forecast
United is foresting a record $14.1 to $14.3 billion in revenues for the full year.

Chief executive Matthew Flannery said: “I’m very pleased with our third-quarter results across growth, profitability and returns, which were underpinned by broad based activity. Our ability to provide our customers with a highly differentiated value proposition, led by safety and productivity, is enabling us to outpace the broader industry and create value for our investors.”

“Our full year guidance speaks to the continued strength of our markets. Looking beyond 2023, we believe that our strategy positions us well to support our customers as they execute on the tailwinds we see across infrastructure, industrial manufacturing, and energy and power. Combined, these support our goals for profitable growth, strong cash flow, and attractive returns for our shareholders.”

Vertikal Comment

No question about it, this is another strong performance from United with its 10 month revenues likely to significantly exceed last year’s result for the full year. At present it is predicting a year on year growth in revenues of 23 percent, pretty impressive for a business so large. However, it must be remembered that much of this has come from the acquisition, at the end of last year of Ahern Rentals, which has not only contributed to its growing rental revenues, but also represents a decent chunk of the strong spike in used equipment sales. The average age of the United fleet while having fallen a little in the third quarter is still well above the 36 months that United used to promote as ideal, only few years back.

It will be very interesting to see how the business develops in the new year with the Ahern acquisition dropping out of the comparatives while having been, one assumes, fully or largely integrated.

All said and done another very positive result.