Herc Rental Revenue Up 37% in Q2

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Equipment rental revenue for Herc Holdings was $448.0 million in its second quarter of 2021, up 36.8 percent over the same period last year. Total revenue was $490.9 million for the quarter.

Net income was $47.1 million in the second quarter, up from $2.0 million in 2020. Pricing increased 1.9 percent compared to the second quarter of 2020.

“Our second quarter performance provides momentum for the rest of 2021,” said Larry Silber, president/CEO, in a prepared statement. “Tight supply of new equipment and steady demand from a number of key markets have provided a positive operating environment.”

Herc rental fleet metrics

Net rental equipment capital expenditures were $168.3 million for the first half of 2021. Gross rental equipment capital expenditures were $239.3 million compared with $161.5 million in the comparable period in 2020. Proceeds from disposals were $71.0 million compared to $67.9 million last year.

As of June 30, 2021, total fleet was approximately $3.76 billion at original equipment cost (OEC). Average fleet at OEC decreased year-over-year by 1.9 percent compared to the prior-year period.

Average fleet age was 48 months as of June 30, 2021 compared with 47 months in the same period in 2020.

Herc YTD financials

Total revenues increased 17.5 percent to $944.7 million year-to-date, compared to $804.2 million in the first six months of 2020. The year-over-year increase of $140.5 million was related primarily to an increase in equipment rental revenue of $134.3 million. Sales of rental equipment were nearly flat.

Equipment rental revenue increased 18.8 percent to $848.4 million compared to $714.1 million in the prior-year period.

Total revenues increased 17.5 percent to $944.7 million compared to $804.2 million in the prior-year period.

Pricing increased 0.9 percent compared to the same period in 2020.

Herc outlook for 2021

The company raised its 2021 guidance ranges with net rental equipment capital expenditures increasing from the range of $400 million to $450 million to a new range of $500 to $550 million.

“We intend to continue to expand our market share, particularly in our specialty businesses, and maximize our operating leverage to drive margins,” Silber stated.

“Our strong free cash flow supports our fleet expenditures, greenfield expansion, and M&A activity. We are excited to carry our momentum from Q2 into the balance of 2021 for what looks likely to be a record year for Herc Rentals revenues and net income. With net leverage now below our target range of 2x to 3x, we are also reviewing our capital allocation plan.”

Source: Herc Holdings