23.11.2009

Ahern down 28%

Las Vegas based Ahern Rentals has reported third quarter revenues of $72.5 million, a fall of 28 percent on last year.

The net result was a pre tax loss of $16.5 million, compared to a profit at the same point in 2008 of $4.7 million.

Nine month, year to date revenues were $214.7 million a fall is just under 27 percent, while the loss was $48 million compared to a profit of $9.5 million in 2008. Same store revenues declined by 33 percent.

Ahern says that the fall is due to a combination of weaker rates – down 16 percent – and lower physical utilisation, which dropped from 70 percent in 2008 to just 56 percent this year.

The company which expanded rapidly prior to the slow down, has cut its net debt from $616 million to $607 million, largely through the cutting of capital investment- it has spent just $22.2 million on new rental equipment so far this year, compared with $120 million in 2008.

In spite of this the company says that it will continue to expand its network and is seeking additional funding. It says that it will add 15 additional locations in 2010 the same as it has added in the past 12 months. The intention is to spread the current fleet over more depots in a bid to increase utilisation and rates.

Vertikal Comment

Ahern is taking one of the most aggressive stances of any aerial lift rental company, much of this comes from the fact that its home market, Las Vegas, continues to see a massive slowdown in construction activity.

The company carries a huge debt load but is also banking on improvements beginning to come through in the second half of 2010. Don Ahern has bet and won many times before and generally has a good nose for the business. Whether he can pull it of yet again is anyone’s guess, his track record suggests he might.