RERMAG

Profits up While Volume Drops for RSC

SCOTTSDALE, Ariz. — Rental Service Corp. totaled $1.5 billion in revenue in 2003, according to Stockholm, Sweden-based Atlas Copco's unaudited interim report issued last month. The figure is down from $1.78 billion (based on current currency conversion rates) grossed in 2002, according to the report. With rental revenue accounting for about 75 percent of RSC's revenue, the company grossed about $1.125 billion in rental revenue in '03, down slightly from $1.141 billion in 2002.

Total revenues for the fourth quarter decreased about 17 percent year over year, heavily affected by a negative currency translation effect of 17 percent. Rental revenues for the fourth quarter increased about 2 percent in U.S. dollars, consisting of an increase in rental rates of 3.5 percent and a decline in volume of 1.5 percent. The slight drop in volume reflected a lower number of stores, 483, compared to 506 at the end of 2002, while same-store rental volume increased a couple of percent. Sales of merchandise, spare parts, and new equipment, representing 13 percent of total revenues, were down 14 percent in U.S. dollars, largely because of decreased demand and the closure of 23 stores during the year.

Sales of used equipment, accounting for the remaining 12 percent of total revenues, increased 64 percent in 4Q03, compared to the same period in 2002.

Rental fleet at original cost was 4 percent lower than 2002 and the average equipment age was about 42 months. Fleet utilization improved and reached close to 65 percent in the quarter and more than 63 percent for the year.

Operating profit for RSC was about $116 million, up from about $88 million in 2002.

Scottsdale, Ariz.-based RSC is No. 2 on the RER 100.

TAGS: Ar Rental News
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