Hertz Announce Fourth Quarter & Yearly Results

Hi all,

2012 was an interesting year for Hertz, they cemented their position as the fourth quartersecond largest car rental supplier in the USA by finally completing the long drawn out process of purchasing Dollar Thrifty and sold off their value brand Advantage Rent A Car to FSNA but what effect did this have on their 2012 results?

Yearly Results

Car rental revenues for 2012 increased 7.8%  to $7.6 billion compared to 2011. Global revenue was also up to around $9 Billion (Hertz don’t just offer car rental you know) that’s growth of 8.7%.

For USA car hire, which is the part we’re most interested in Hertz reported a 9.6% increase to $4.9 billion compated to 2011. The company reports that this was driven by strong off-airport revenue and a double-digit increase in Advantage revenue and one-and-a-half months of Dollar Thrifty.

Fourth Quarter Results

Hertz’s fourth quarter results were again very positive with an increase of 15.1% for global revenue to $2.3 Billion.

Car hire USA revenues which included 43 days of Dollar Thrifty ownership increased 24.5% for the quarter.

One slight blip on the Hertz radar was the performance of European car hire which saw revenues declined by 9.8% in the fourth quarter.

2013

Mark Frissora, Hertz Chairman & CEO

We continue to make significant progress reducing fleet expenses, our largest operating cost, and we are encouraged that Dollar Thrifty synergies are likely to exceed our earlier forecasts. Additionally, we are off to a fast start this year with January 2013 car rental RPD at U.S. airports up 6% for Hertz and 2.6% for Dollar Thrifty.

As a colleague of mine quipped “Dollar thrifty synergies means redundancies” but obviosuly that is the nature of the beast, you don’t need 2 people to do 1 persons job.

What Hertz have planned for Dollar Thirfty is still anyone’s guess but you’ll be the first to know when we do.

regards,

James

 car hire USA

My Take On The Dollar Thrifty Buy Out

Hi all,

As I’ve reported over the past year a couple of companies have lodged official bids to purchase Dollar Rent A Car who also own Thrifty Car Rental. As this process seems to have dragged on I thought it might be a good time to briefly speak about where this deal is right now and what the possible out come could be.

Originally Hertz were the first company to show an interest in purchasing Dollar Thrifty, Hertz required a leisure arm and Dollar Thrifty fit perfectly in to that bracket.  The offer was in the process of being presented to the shareholders when Avis Budget decided to enter in to the bidding. For Avis Budget the purchase would signify a massive boost in market share.

The Avis Budget bid was accepted in principle and both parties handed the details over to the FTC for approval.

The issues with any purchase of Dollar Thrifty with the FTC is, what is best for the customer, does the purchase of one of America’s most successful, and at present cash rich companies, reduce competitiveness within the car rental industry, reducing consumer choice and in doing so push up pricing?

In my opinion the Avis Budget deal would prove very hard to push through, and the amount of time the FTC is taking over deliberating on it seems to back my thinking.

With Dollar Thrifty seemingly preferring the Avis Budget deal, Hertz issued a statement stating they would concentrate on their low cost brand, Advantage Rent A Car…

Then on the 10th May Hertz came back to the party with an improved offer, they also seemed to have a plan on how to win the FTC over by agreeing in principle to sell on their own lesser brand Advantage Rent A Car.

Coincidently Avis Budget agreed a deal to buy out Avis Europe for £635 million practically taking them out of the running to purchase Dollar Thrifty.

Now from where I stand this leaves us with the following senario…

  • Dollar Thrifty want to sell too Hertz but don’t need to.
  • FTC want Hertz to sell Advantage.
  • Hertz wont sell Advantage unless they know they will get Dollar Thrifty.

So we have a bit of a stand off at present… Rumour has it, and its only rumour, is that Fox Rent A  Car could be the company to purchase Advantage Rent A Car, I have no insider knowledge on this, I just saw it on a predominant car rental blog and other sites.

For me, I think Hertz will complete a deal to purchase Dollar Thrifty but I wouldn’t expect a quick sale. Advantage will have to be sold on to make this deal happen and to be fair there aren’t many companies who would have the cash or the know how, so Fox Rent A Car is as good a guess as any.

What’s your take on the this?

regards,

James

 car hire USA


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