United Rentals ups CapEx for 2021
By Belinda Smart28 January 2021
United Rentals results for Q4 2020 to 31 December show net profits down 12% year-on-year to US$297 million (€245 million), with revenues down 7% at $2.28 billion (€1.88 billion), reflecting the commercial fall-out from Covid-19.
Its general rentals business was hit worst, with revenues 11.1% lower for the quarter, which compared to a fall of 6.6% at its specialty rental division; Trench, Power and Fluid Solutions. Full year sales were down 9% at $8.5 billion, with net profits 24% lower at $890 million.
The company forecast that gross capital expenditure on its fleet will return to pre-Covid levels this year, to between $2.0 and $2.3 billion, up from $0.96 billion in 2020. Gross fleet CapEx in 2019 was $2.1 billion.
United Rentals CEO Matthew Flannery said the results were stronger than anticipated given the impact of Covid-19, driven by better-than-expected rental volume and used equipment sales. Q4 saw used equipment sales generate $275 million (€226 million) of proceeds at a gross margin of 37%.
Looking ahead to 2021 Flannery said, “Our guidance reflects an improvement in customer sentiment as the economy continues to heal.”
Following a difficult first quarter, “we expect to pivot back to growth through the remainder of the year, which, together with continued cost discipline, will deliver strong profitability,” he said.
“We anticipate another robust year of free cash flow generation, after significantly increasing our capex to support growing demand.”