Worldwide equipment rental revenues for Hertz Equipment Rental Corp. were $401.8 million for the third quarter, a 10.7-percent increase compared to the previous year’s third quarter. The primary drivers of the increase, the company said, were stronger equipment rental volumes — up 14.9 percent — and a 2.9-percent increase in pricing.
Volume increased on strong industrial and improving construction performance.
Adjusted pre-tax income for HERC worldwide was $87.5 million, compared to $76.2 million in the year-ago period, a 14.8-percent hike, primarily resulting from increased volume, improved pricing and cost management initiatives including improved time and dollar utilization. Worldwide equipment rental achieved an adjusted pre-tax margin of 21.8 percent, and a corporate EBITDA margin of 45.5 percent for the quarter.
Hertz Global Holdings, including its car rental operations, posted third-quarter 2013 worldwide revenues of $3.1 billion, a 22-percent year-over-year increase.
“Our ninth consecutive quarter of record adjusted pre-tax income, which increased 22.3-percent year-over-year in the third quarter, was driven by solid revenue growth in four key businesses: U.S. off-airport car rental, Dollar Thrifty, Donlen and worldwide equipment rental,” said Mark Frissora, Hertz chairman and CEO.
Regarding equipment rental Frissora said: “Its string of year-over-year double-digit growth continued, with total revenues up 12.3 percent in North America, excluding foreign exchange, versus the market’s projected 7-percent growth rate this year, according to the American Rental Association. North America represented 93 percent of total equipment rental revenue. The top line increase is being driven by continued strength in oil and gas, industrial and specialty markets and the early beginnings of the construction recovery. Our North American construction rental revenue was up 16 percent in the third quarter.
“The Architectural Billings Index continues to trend well, a positive sign for our business, and the construction loan pipeline continues to show positive momentum. In fact, construction loan commitments for the quarter ended June 30, which is the latest data available, were up about 29 percent year over year. Hertz is well positioned to take advantage of the construction upturn with the fleet investments we made last year and in 2013 first half. In the third quarter, total pricing in North America increased 3.1 percent, with non-contracted pricing up 4.2 percent. National accounts represent 51 percent of the third-quarter rental revenue. The 15-percent higher volume in North America benefited from greater overall rental penetration as more companies turned to renting versus buying equipment.”
Frissora added that entry into new markets and geographies through small, strategic acquisitions also is driving revenue growth and improved fleet utilization.
Based in Park Ridge, N.J., Hertz Equipment Rental Corp. is No. 3 on the RER 100.
