Herc Rentals posted total fourth quarter 2023 revenues of $831 million, compared to $786 million in the fourth quarter of 2022, a 5.7-percent increase. Rental revenue in the fourth quarter was $748 million compared to $713 million in the fourth quarter of 2022, a 4.9-percent hike.
The fourth quarter numbers represented, percentagewise, a slowdown compared to the rest of the year, although still showed considerable growth. Total revenue for the full year was $3.282 billion compared to $2.740 billion in 2022, a 19.8-percent jump. Equipment rental revenue for the full year totaled $2.870 billion compared to $2.552 billion in 2022, a 12.5-percent increase.
Sales of used rental equipment was a huge increase for Herc. For the full year, the sales totaled $346 billion compared to $125 billion, nearly triple the amount. In the fourth quarter, sales of rental equipment were $68 million compared to $57 million a year ago, a 19.3-percent hike.
Dollar utilization for the full year was 40.8 percent compared to 43.3 percent in 2022. The change was primarily the result of the shutdown in the studio entertainment business as a result of labor disruptions in the film and television industry, as well as the continued challenges managing the supply chain in some categories of equipment, especially in the first half of the year.
In the fourth quarter the company added 15 locations through acquisitions and greenfield openings. In the full year, Herc added 42 branches, completing 12 acquisitions with a total of 21 locations and opening 21 new greenfield locations in 2023.
“We closed out 2023 with positive operating momentum, contributing to another year of double-digit revenue and adjusted EBITDA growth, inflationary pressures were successfully managed through revenue initiatives, and we maintained cost discipline while continuing to invest in our business,” said Larry Silber, president and CEO. “I couldn’t be prouder of what our team accomplished last year. They demonstrated tremendous operational strength and agility throughout 2023, successfully leveraging our prominent industry position to capitalize on stimulus and secular opportunities, and to continue to scale our operations for profitable share growth while expanding margins.”
Strong expectations for 2024
“For 2024, we expect to deliver 7 to 10 percent organic rental revenue growth and 6 to 9 percent higher adjusted EBITDA year over year, outpacing industry growth forecasts and driving incremental margin expansion as we enhance asset efficiency for greater operating leverage and roll out our new E3 Operating System,” said Silber. “Our guidance excludes our Cinelease studio entertainment business, which is currently being held for sale.
“We see continued market strength and remain confident that our diligent focus on our strategic priorities — including investing in our classic and specialty fleet, expanding our urban-market presence through greenfield locations and strategic acquisitions, enhancing our industry-leading digital offering, and delivering an exceptional customer experience — will improve performance in the near term and deliver value creation over the long term."
Rental pricing increased 6.9 percent year over year. The total fleet at the end of the year valued $6.3 billion at original equipment cost at an average fleet age of 45 months, compared to 48 months at the end of 2023.
Headquartered in Bonita Springs, Fla., Herc Rentals is No. 3 on the RER 100.
