Diversification helps Herc Rentals mitigate COVID-19 impact

Oct. 25, 2020

Despite dealing with the impact of the coronavirus (COVID-19) pandemic, Herc Rentals, Bonita Springs, Fla., reported 14 percent year-over-year rental revenue growth for its specialty ProSolutions business in the third quarter, helping mitigate an overall quarterly revenue decline compared to last year.

In total, Herc Rentals reported equipment rental revenue of $402.3 million in the third quarter, down about 12.5 percent from last year’s third quarter rental revenue of $459.6 million.

In addition to the positive results for the ProSolutions business, Herc Rentals also reported sequential improvement in volume and rental revenue from mid-April through September.

“2020 will certainly go down in the record books as the year that Herc Rentals rose to the challenges of COVID-19 and numerous natural disasters. Faced with the impact of COVID-19 on economic conditions in our markets, our team has continued to deliver outstanding cost savings and efficiencies despite the challenges of extra safety precautions relating to social distancing and wearing personal protective equipment while serving the needs of our customers,” Larry Silber, Herc Rentals CEO, said during a conference call with analysts on Oct. 22.

“Our inherent strengths and our quick reactions contributed to better than anticipated results in the third quarter, and we are cautiously optimistic about the balance of the year. As an essential service, our locations remained open for business and we have continued to provide our customers with rental equipment as and where needed, with the exception of our dedicated entertainment business locations,” Silber said.

Aaron Birnbaum, Herc Rentals senior vice president and chief operating officer, added that the company’s diversification initiative previously put in place to help offset seasonal and/or server economic events has paid off this year as the growing specialty business, including emergency response initiatives, helped mitigate some of the impact of COVID-19.

“The expansion of our business in the climate and remediation sectors, as well as other targeted industry verticals, helped offset the downturn in rental revenue we experienced from nonresidential construction and government spending,” Birnbaum said.

“In September, we responded to the needs of our customers and dealing with the damage sustained by Hurricanes Laura and Sally in the Gulf region, which contributed to our improved fleet on rent in the quarter. And at the end of the third quarter, our ProSolutions team was there to serve and assist as soon as the storms passed and the floodwater receded,” he said.

In addition, Birnbaum said the company remains committed to “keeping our team, their families, our customers and our communities safe. While we enhanced our operational and safety procedures to operate in this challenging environment, all of our region reported at least 88 percent perfect days for the nine months of 2020.”

The company also expects to open between six and 10 locations this year and to continue to grow with new locations in high-growth urban markets for the rest of this year and into 2021.

 

 

Don’t miss the latest news from the equipment and event rental industry. Click here to subscribe to Rental Pulse and Rental Management magazine.


An official publication of the American Rental Association.
Produced by Rental Management Group. Copyright © 2020 Rental Pulse all rights reserved