H&E reports ‘modest oversupply’ of equipment

H&E Equipment Services reported softening fleet utilisation, lower rental rates and a “lingering modest oversupply” of equipment as it posted third quarter revenues down 4.0% year-on-year to US$384.9 million. EBITDA profit was 8.4% lower at $175.3 million.

The US rental business said industry demand was lower than the previous year, with average time utilisation of its fleet at 67.6% compared to 70.0% in the third quarter of 2023, and average rental rates down 0.1%, and 0.6% lower compared to the second quarter of this year.

Despite the declining metrics, rental revenues were up 2.8% in the quarter because of the continued expansion of its branch network, with eight new locations opened in the quarter.

Brad Barber, chief executive officer of H&E, said; “Construction spending in the US continues to demonstrate the slowing rate of growth observed over the first half of 2024.

H&E Indio in California, US. (Photo: H&E)

“We believe a trend of moderating activity will persist through the remainder of the year, with physical fleet utilisation and rental rates below year-ago measures.”

He said market prospects for 2025 were more positive; “The Dodge Momentum Index (DMI), a leading indicator of construction spending, has exhibited gains for five of the last six months, while construction employment remains on a steady upward trajectory.

“Also, a cycle of easing interest rates is expected to have positive implications for local construction activity as projects are reevaluated under more favourable lending conditions.”

He added that mega projects – including data centres, solar and wind farms and LNG export facilities – remained an area of strong expansion; “Our branch expansion has led to a greater and more diverse exposure to mega projects”.

H&E now has 157 locations in 32 states. Its branch count is up more than 14% in 2024 and approximately 54% since the end of 2021.