03.08.2009

RSC drops 22%

RSC, one of North America’s largest equipment rental companies has reported first half revenues of $678 million, down 22 percent on the same period last year.

Rental revenues fared worse dropping 28 percent to $558 million, while the company reported a pre-tax loss of $37.7 million compared to a profit last year of $102 million.

In the second quarter the situation was worse, with overall revenues down 27 percent to $326.6 million of which rentals were $270.5 million a decline of 33 percent. The company booked a pre tax loss for the quarter of $16.5 million, compared to $66 million in 2008.

All sectors of the business were down during the first two quarters except sales of used equipment, which reflect the company’s fleet reduction efforts. Rental utilisation was 57.6 percent compared to over 71 percent last year and the average age of the fleet was 36 months compared to 29 months at the half way point of 2008.

Chief executive Erik Olsson said: “We made progress on a number of fronts during the second quarter. First and foremost, we delivered another quarter of strong cash flows and remain on track to meet our free cash flow guidance of $340 - $370 million for the full year 2009. We continued to right-size the business to current demand, while also continuing to position the company for the future with seven new location openings.”

“We executed well on our priorities and, as a result, demand for our fleet has stabilized over the past four months and utilization was trending up towards the end of the quarter. Lastly, we successfully concluded a major refinancing of the company in July, enhancing liquidity and extending maturities, which will provide significant financial and operational flexibility going forward.”