H&E Q2 revenue down 16%
05 August 2020
Both the revenues and profits of H&E Equipment Services were significantly negatively impacted by the Covid-19 pandemic in the second quarter of 2020. While there are signs of improvement, the economic headwinds are expected to continue for the full year.
Revenues dropped by 16.6% to $278.3 million, compared to $333.6 million in the same period of the previous year.
This decline was attributed primarily to a 19%, or $36.5 million, fall in total rental revenues.
The US-based company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) decreased by 19.3% to $95.3 million in the second quarter, yielding a margin of 34.2% of revenues compared to 35.4% in the previous year.
Brad Barber, CEO and President of H&E, said, “As a result of the Covid-19 outbreak and subsequent economic slowdown, the second quarter was a challenging period for our business.
“Work continued in our end-user markets while some projects were paused, delayed or cancelled.
“As we expected, demand for rental equipment declined, which pressured rates, physical utilisation and ultimately rental revenue.â€
Average time utilisation was 59.5%, compared to 71.2% in the second quarter of 2019.
Utilisation reached its lowest point in April and has since improved and stabilised.
Average rental rates were down 2.8% on the previous year.
Barber said, “Recently, there are some encouraging trends compared to the second quarter; however, we believe the headwinds related to Covid-19 will persist throughout the balance of this year.
“There is still tremendous uncertainty regarding the cadence of the economic recovery, including the outlook for the non-residential construction markets.
“We are working very hard to generate returns for our shareholders in the current environment and I am very pleased with how our team has responded to these significant marketplace challenges.â€