Herc posts upbeat Q2 and H1 2021 results
By Belinda Smart23 July 2021
US rental company Herc Rentals has reported a 36.8% increase in equipment rental revenue to $448.0 million in the second quarter of 2021, from $327.6 million for the same period last year.
Total revenues were up 33.4% to $490.9 million compared to $368.0 million in the prior-year period, an increase of $122.9 million supported by a $120.4 million rise in equipment rental revenue.
President and CEO Larry Silber indicated the results demonstrated a favourable climate for rental businesses.
“Tight supply of new equipment and steady demand from a number of key markets have provided a positive operating environment,” he said.
Herc Rental’s results for the first half of 2021 showed equipment rental revenue up 18.8% to $848.4 million compared to $714.1 million in the prior-year period.
Total revenues increased 17.5% to $944.7 million compared to $804.2 million in the prior-year period.
Adjusted EBITDA for the first half increased 32.1% to $392.3 million compared to $297.0 million in the previous period, due to improved operating efficiencies and higher contributions from the sale of rental equipment.
Gross rental equipment capital expenditures for the first half of 2021 were $239.3 million compared with $161.5 million in the comparable prior-year period.
The strong results have prompted Herc to raise its full year 2021 EBITDA guidance to $840 million - $870 million from its previous $800 million - $840 million guidance.
Net capital fleet expenditures have been adjusted to $500 million - $550 million, up from $400 million - $450 million.
Silber said Herc would continue to expand market share, “particularly in our specialty businesses, and maximize our operating leverage to drive margins.”
The company’s strong free cash flow supported fleet expenditures, greenfield expansion and M&A activity, he added.
As of June 30, 2021, the Company’s total fleet was approximately $3.76 billion at OEC. Average fleet age was 48 months as of June 30, 2021 compared with 47 months in the comparable prior-year period.