United Rentals positive after 'very successful' RSC integration

By Murray Pollok24 January 2013

United Rentals said the “very successful” integration of RSC would lead to a forecast 13-18% increase in EBITDA profits this year to US$2.25-2.35 billion on forecast revenues of $4.9-5.1 billion.

The company reported final quarter 2012 revenues up 13.2% to $1.25 billion, while full year sales increased 12.8% to $4.66 billion and EBITDA profits rose to $1.99 billion from $1.49 billion.

Michael Kneeland, chief executive officer of United Rentals, said, “The integration with RSC has been very successful, and while it's not complete, we can now shift our focus to driving improvements across the entire business...

"We see opportunities to continue to grow our key accounts, reap the synergies of the merger and expand our fleet, while further lowering our debt leverage."

The company will further expand its fleet this year with gross capital expenditure expected to be around $1.5 billion. The value of the fleet, at original cost, was $7.23 billion at the end of December, up from $4.05 billion a year ago, reflecting the addition of the RSC fleet.

Mr Kneeland said United was benefiting a 50/50 balance between construction and industrial/non-construction business; “We also expect to benefit further from the secular shift to rental. And non-residential construction is predicted to show reasonable improvement, with larger upswings in 2014 and 2015."

The 13.2% increase in rental revenues in 2012 reflected an increase of 11.4% in the volume of equipment on rent and a 6.9% increase in rental rates. Utilisation for the year was 67.5% and the company is expecting that to rise to approximately 68.0% this year.

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