Herc predicted to outpace rental growth

Photo: Herc Rentals

Herc Rentals has said it expects to outpace rental industry growth forecasts in 2024, backed up by “continued market strength” and “strategic priorities” for fleet investment and acquisitions.

President and chief executive officer (CEO) Larry Silber said the company is predicting between 7-10% organic rental revenue growth and 6-9% higher adjusted EBITDA in 2024.

The company also said it will decrease net capital investment in fleet to between $500 million to $700 million, having maintained a high level of investment in recent years. 

The announcement was made during its financial results investors call for the 2023 financial year, which revealed a 12% increase in rental equipment revenues, contributing to total revenues of $3.2 billion. 

EBITDA profit was up by 18% to $1.4 million compared to $1.2 million in 2022, while EBITDA for the fourth quarter also increased by 6% to $382 million.

Net rental equipment capital expenditures fell slightly below the previous guidance of between $1 billion and $1.2 billion at $995 million, although average original equipment cost increased by 21%

Meanwhile, the company completed 12 acquisitions with a total of 21 locations and opened 21 new greenfield locations in 2023, 11 of which were added to its specialty offering.

Larry Silber, president and chief executive officer, said the results are a sign of “positive operating momentum” from the company; “Inflationary pressures were successfully managed through revenue initiatives, and we maintained cost discipline while continuing to invest in our business.

“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.”