Herc upbeat on Q1 2021 results
By Belinda Smart22 April 2021
US rental company Herc Rentals’ first quarter 2021 results indicate strengthening rental revenues and fleet investment.
Equipment rental revenue increased 3.6% to $400.4 million compared to $386.5 million in Q1 2020, and total revenues were up 4.0% to $453.8 million from $436.2 million in the prior-year period.
The increase related primarily to higher equipment rental revenue of $13.9 million, while sales of used rental fleet were up $4.2 million year-on-year.
The company reported net profits of $32.9 million in the quarter, compared to a net loss of $3.7 million in the same 2020 period. Adjusted EBITDA grew 25.0% to $184.6 million.
“Our year is off to a great start with first quarter total revenues up 4% and adjusted EBITDA up 25% compared with last year,” said Larry Silber, president and CEO.
“Our adjusted EBITDA margin hit a record for the first quarter of 40.7% and reflects the strength of our operating model. Strong performance by our ProSolutions [Climate, Pump & Power solutions] and entertainment rental businesses drove rental revenue growth.”
The company upped its capital expenditure on fleet, with gross spending of $90.9 million compared with $83.0 million in the prior-year period.
Herc upgraded its 2021 outlook on EBITDA profit from the previous guidance of $730-760 million to $800-840 million. Its guidance on net capital expenditure on fleet remained the same at between $400 and $450 million.
As of March 31, 2021, Herc’s total fleet was approximately $3.63 billion at OEC (original equipment cost). The average fleet age of 48 months as of March 31, 2021 remained the same as the comparable prior-year period.