Rental revenues up at H&E

US-based H&E Equipment Services has affirmed its positive outlook for 2014 and into 2015 after reported strong third quarter results, fuelled by growing rental revenues.

The company said overall revenues were up 1.7% year-on-year to US$275 million (€219 million) for the three months to 30 September, while net income increased 9.7% to US$15.3 million (€12.2 million).

Rental revenues jumped 21% compared to the third quarter of 2013 to US$108 million (€86 million). H&E said this was due to a larger fleet, higher physical utilisation and improved rates compared to a year ago.

It said its rental gross margin increased to 50.5% compared to 49.6% a year ago, while average time utilisation (based on units available for rent) was 68.3% compared to 66.6% last year and 67% last quarter.

Average rental rates also increased 2.9% compared to a year ago, and improved 1.3% compared to the second quarter of this year, according to the company.

The average fleet age at the end of September was 31.8 months, compared to 32.3 months at the end of the last quarter. H&E said the average industry fleet age was 42.9 months.

CEO John Engquist said the company believed the positive results further substantiated the recovery in the non-residential construction market.

“Our outlook for the remainder of this year and into 2015 remains positive as we believe our company will continue to benefit from the anticipated growth in the commercial construction markets in the US," he said.

“The significant capital projects forecasted for our Gulf Coast region related to major chemical, energy and manufacturing are reported to be on track. We anticipate further fleet investment during the fourth quarter based on the current demand in our markets as well as in anticipation of these projects. Our company remains focussed on executing our strategy and profitable growth,” Mr Engquist added.