Second Quarter Continues Challenging for Canadian Equipment Rental Corp.
Aug. 21, 2016
Revenues decreased by 24 percent in the second quarter for Canadian Equipment Rental Corp., dropping from CDN $9.3 million to $7.1 million. The General Rental segment dropped by $1.7 million compared to last year’s second quarter, because of lower commercial and residential construction, with utilization and pricing in decline. Reduced drilling activity and pricing pressure caused the Energy Services segment to slide by $0.9 million. The Waste Management segment increased revenue by $0.4 million with the addition of two municipal contracts in early 2016. Net loss for the quarter was $4.8 million, compared to a loss of $2 million in the year-ago quarter. Adjusted EBITDA for the quarter was $0.3 million compared to $1.3 million in the year-ago period.The combination of the continued economic downturn in Alberta, excess idle equipment from existing competitors and the entry of new competitors into the Alberta market have created less demand for the General Rental segment, along with an oversupply of rental equipment in the market.CERC acknowledges that the challenging economic environment shows no signs of significant improvement. CERC’s customers have reduced their capital expenditures and are delaying their investment decisions, thus impacting the utilization and day rates of equipment in General Rentals and Energy Services. The company is concentrating on managing costs and refining strategy to ensure maximum equipment utilization. In the first half of 2016, management reduced headcount, including many senior positions, reduced labor hours, and consolidated operating facilities.
