Stable nine months for United Rentals
By Helen Wright20 October 2016
US-based United Rentals, the world’s largest rental company, has seen a boost from its Trench Safety and Power & HVAC specialty businesses for the nine months to the end of September, but reported flat overall results.
Total nine-month revenues stood at US$4.24 billion (€3.86 billion), compared to US$4.25 billion (€3.87 billion) for the same period in 2015. Of this, rental revenues were US$3.64 billion (€3.32 billion) for the 2016 nine-months, slightly down compared to US$3.67 billion (€3.34 billion) for the year to 30 September, 2015.
Nevertheless, the company said rental revenues generated by its Trench Safety and Power & HVAC specialty businesses, combined, increased 9.3% year-on-year for the nine months to US$576 million (€525 million).
United Rentals said overall utilisation increased 40 basis points year-on-year to 67.4%, and net income stood at US$413 million (€376 million), compared to US$416 million (€379 million) for the same nine months a year ago.
CEO Michael Kneeland said the company had benefited from continued growth on the East and West Coasts of the US in the third quarter, as well as the start of numerous large projects.
“We were also pleased by solid contributions from our specialty businesses and cross-selling initiatives, which helped offset ongoing headwinds in oil and gas markets and Canada," he said.
"Based on what we saw through the third quarter, and what we hear from our customers, we remain optimistic about the cycle. We now expect our 2016 rental rates and adjusted earnings before interest, taxes and amortisation to track toward the upper end of prior guidance and free cash flow to exceed our prior expectations.
“This takes into account our plan to invest up to an additional US$50 million (€45.6 million) in fleet to service specific large contract wins. Looking forward, we remain positive about our operating environment and remind investors of the substantial flexibility we have in managing our business for whatever market conditions materialise."
For the full year, United Rentals expects to book revenues in the range of US$5.65 billion (€5.1 billion) to US$5.75 billion (€5.24 billion), with net rental capital expenditure of US$750 million (€683 million) after gross purchases of US$1.2 billion (€1.1 billion) to US$1.25 billion (€1.1 billion).