RSC Announces Third Quarter Results

October 31, 2006 • Atlas Copco has reported strong third quarter growth for the previously-owned RSC Equipment Rental, Scottsdale, Ariz., with rental revenues, which make up 87% of the companies total revenue, increasing by 20%. According to the report, growth consisted of an increase in volume of 15% and an increase in rental rates of 5%. Same store rental revenue increased 19%. Sales of used equipment for RSC decreased by 22% and sales of merchandise, spare parts, and new equipment decreased 15%. In total, revenues increased 8%

 

Rental fleet utilization for RSC was 73.5%, and the last 12 month average increased to a new all-time high of 72%. Net investments on the company's rental fleet increased, reflecting higher rental volume and the high fleet utilization level. The average age of the fleet was reduced to 2.1 years. Non-residential construction grew by an estimated 15%, with high growth rates for manufacturing, power, and office construction. Total construction activity recorded more modest growth for the company as residential construction dropped about 3%. Industrial activity, measured by capacity utilizations, was 82%.

 

Operating profit for RSC increased 22%, corresponding to a margin of 29%. Both profit and margin were the highest numbers ever for a business quarter at RSC. RSC's operating margin benefited primarily from increased rental revenue volume, favorable pricing development and effects from ongoing efficiency projects. Operational costs increased somewhat as a consequence of the strong rental volume increase and the higher depreciation expense on a larger rental fleet.