03.08.2009

United down 25%

United Rentals, the world’s largest equipment rental company, has reported first half revenues of $1.2 billion, a drop of 24.6 percent from the same period last year. Rental revenues were down 25 percent at $902 million.

During the same period the company posted a pre-tax loss of $62 million, compared to a profit of $135 million in 2008.

The second quarter showed a similar trend with overall revenues down 26 percent to $615 million of which rental revenues were $454 million, a fall of almost 28 percent. The company also posted a $29 million loss compared to a profit of $76 million in the second quarter 2008.

United sold $271 million worth of older equipment from its fleet, closed 38 branches and reduced its headcount by around 800 employees. In spite of selling off a good deal of old equipment the average age of the United fleet moved from 39 months at the end of December to 40 months at the end of June. The company traditionally aims for an average age of 36 months or less.

‘Time utilisation’ decreased 2.4 percent to 61.3 percent, with rental rates declining 14.0 percent compared to the second quarter last year. Dollar utilisation, which reflects the impact of both rental rates and utilisation, decreased 12.5 percent to 44.9 percent.

Michael Kneeland, chief executive, said: "Our company is bringing discipline to every area of our operations, while expanding the relationships that are vital to our strategic growth, particularly with larger customers. In the second quarter, we continued to proactively manage our capital structure, cash flow and costs to provide us with greater financial flexibility. Based on the success of these initiatives, we are comfortable increasing our full year estimates for both free cash flow and SG&A expense reduction."

"Looking forward, we believe that our operating environment will remain very challenging. Our best estimate at this time is that non-residential construction activity will continue to decline on a year-over-year basis into 2010, although the rate of decline may moderate. Our infrastructure rentals should see the benefit of stimulus funds, while on a macro level we believe that our end markets will stabilise next year and begin a gradual recovery."