Herc Holdings cuts capex by 46% in 2020 amid 3Q revenue decline

Marcia Gruver Doyle Pix
Updated Oct 24, 2020

Screen Shot 2016 06 30 At 6 01 54 PmHerc Holdings, parent of HercRentals, reports a 12 percent decrease in rental revenues during the third quarter and a 10 percent decrease in total revenues.

Equipment rental revenues for the quarter were $402.3 million compared to $459.6 million during the same period last year. Total revenues decreased from $508.1 million last year to $456.7 million this year during the quarter.

For the first nine months of 2020, total revenues were down nearly 14 percent, going from $1,458.9 million in 2019 to $1,260.9 million this year.

Year to date, Herc has cut its gross fleet capital expenditures nearly in half, spending $273.2 million this year compared to $506.7 million in 2019, a reduction of 46 percent. In addition, it saw a 27 percent reduction in fleet disposals, going from $156.9 million to $114.1 million.

As of Sept. 30th, Herc’s total fleet is $3.73 billion in original equipment cost. The average fleet age was 47 months, compared with 44 months during the same period last year.

“Volume improved sequentially throughout the third quarter as many of our markets steadily recovered from the impact of COVID-19 and normal seasonality returned to the business,” says Larry Silber, president and chief executive officer. “Despite the challenging business environment, our customer and industry diversification strategy continued to demonstrate the resilience of our business model.”

Silber says Herc expects rental revenues to decline 6 to 8 percent year over year. “With reduced leverage and ample liquidity we are well positioned for 2021,” he says.