Neff Hikes Rental Revenue in Fourth Quarter and Full Year 2017
Rental revenues jumped 6 percent to $91.7 million for Neff Rental in the fourth quarter total revenue compared to $86.5 million in 2015’s fourth quarter. However, total revenues for the quarter were $102.3 million compared to $106.1 million in the fourth quarter of 2015, a 3.6-percent decrease. Rental rates increased 0.5 percent year over year in the fourth quarter.
The average original equipment cost of Neff’s rental fleet increased by 6.1 percent to $830.5 million in the fourth quarter of 2016. Time utilization in the fourth quarter was 66.4 percent, compared to 66.8 percent in Q415.
For the full year, rental revenues increased 7.2 percent to $360.1 million in 2016 compared to $336 million in 2015. Total revenues increased 3.4 percent to $397 million compared to $383.9 million in 2015. Time utilization increased to 67.1 percent compared to 66.8 percent in 2015. However, rental rates dropped 0.5 percent year over year. The original equipment cost of Neff’s rental fleet increased 6.8 percent year over year to $813.6 million.
Adjusted EBITDA increased 4.1 percent in 2016 to $193.8 million compared to $186.2 million in 2015.
“We were pleased with the growth we generated in our fourth quarter and full year 2016 results,” said Graham Hood, CEO of Neff Corp. “During 2016, we grew our rental revenues and operating income in our core construction driven end markets. We anticipate continued growth in these markets in 2017. Our approach for 2017 is to remain focused and selective with our CAPEX spending as we take advantage of strong rental demand in our core construction end markets.”
Return on invested capital was 19.8 percent in 2016 a decrease of 10 basis points from 2015.
Neff expects total revenue in the range of $400 million and $420 million in 2017, with adjusted EBITDA in the range of $195 million to $205 million. It expects year-over-year rental rates to increase 0 percent to 1 percent, and time utilization to be about 67 percent.
“We are optimistic about our markets for 2017,” Hood added. “We believe the multi-year expansion for our industry will continue and we have potential for our earthmoving fleet to continue to gain market share as more customers are making the decision to rent versus own. We are confident that our diverse end-markets and our focus on high growth geographies will enable us to execute and deliver another year of solid growth in 2017. The diminishing impact of the slowdown in our oil and gas markets and the outlook for increased infrastructure spending add to our already positive industry outlook.”
Neff Rental, headquartered in Miami, is No. 12 on the RER 100.
