On Monday, we reported good results in the second quarter, based on key financial indicators. The company has benefited from strong car rental pricing amid vehicle shortages and strong consumer demand.
Hertz (ticker: HTZZ), which came out of bankruptcy on June 30, recorded interest, taxes, depreciation, and pre-amortization adjusted profits, with Ebitda totaling $ 639 million in the second quarter. Said that.
Adjusted Ebitda has more than tripled since the same period in 2019. Hertz believes this is a better comparison than the result of the 2020 pandemic dip, where Ebitda lost $ 587 million. Hertz’s second-quarter net loss was $ 168 million, reflecting restructuring costs of $ 633 million.
It seems that there was no consensus estimate for the second quarter as Hertz recently emerged from bankruptcy.
Early Monday trading raised Hearts shares by 56 cents to $ 17.
Hertz’s adjusted Ebitda for the second quarter was in line with the recently reported $ 624 million.
Avis Budget Group
(CAR), one of Hertz’s two major rivals alongside private companies.
In a statement, Hearts CEO Paul Stone said, “Improvement of our financial position and capital structure gives us the flexibility and resources to leverage our strengths and take advantage of the accelerating momentum in the coming quarters. I will. “
The company said it plans to “re-IPO”, hold an investor roadshow, and relist its shares on major exchanges by the end of 2021. The company’s stock and warrants (HTZZW) are currently traded on Pink Sheets and will be listed on the New York Stock Exchange or Nasdaq by the end of the year.
Hertz and Avis’ results, which were also quarterly records, show a significant improvement in the fate of the car rental industry. The big question for investors is whether the good times will continue until 2022, when the size of the fleet may grow as the current shortage of automotive chips subsides.
Due to the shortage of new cars, Hertz bought used cars this year, increasing the number of cars in the second quarter from 518,000 in the same period last year to about 350,000.
Hertz said it achieved $ 400 million annual cost savings, combined with strong car rental prices, increased its second-quarter margin from 8% in the same period in 2019 to 34%.
According to Hearts, U.S. daily revenue is the most important market to date, averaging $ 65.42 a day in the second quarter, $ 42.71 for the same period in 2019, and 37.95 for the same period last year. Increased from the dollar.
In a pre-recorded phone call posted on Hertz’s website, Hertz’s Chief Financial Officer, Kenny Cheung, said July’s daily earnings were strong.
Hertz has emerged from bankruptcy with a sound balance sheet that includes $ 1.8 billion in cash and $ 1.5 billion in debt, or $ 300 million in net cash. Excludes $ 6.3 billion in asset-backed securities for rental fleets. The average cost of raising an asset loan is less than 2%, saving $ 50 million annually compared to 2019, and Cheung said it was not included in the $ 400 million annual cost savings.
In the phone, Stone said Hertz would have had $ 1 billion in Ebitda in 2019 if cost savings had been taken in 2019. This is impressive as current pricing and profitability are much higher than in 2019.
Due to high car rental prices, this quarter could be stronger than in the second quarter. So Hertz could make a lot of cash by the end of the year.
Hertz said on the phone that Hertz is building electric car rentals, managing its fleet better, raising prices and continuing to invest in technology to improve the customer experience. The CEO said the new app will allow consumers who dislike long lines at airport rental counters to skip the counter and choose their car in a group at the airport.
Hearts shares have fallen from $ 27 since July 1, the first day of trading new Hearts shares, in the sale of travel-related shares. According to Stone, Hertz has seen stable car rental demand despite the rise of Delta variants.
The company is currently valued at approximately $ 8 billion, based on approximately 470 million issued shares. In addition, about 89 million warrants have been issued, rising 5 cents in the session and trading at $ 7.35.
Derivative traders say the strike price of these 30-year warrants is $ 13.80 per share, which is statistically cheap. Barron’s..
Barron’s Wrote favorably to Hertz, claiming that the company will benefit from stronger fleet management, cost savings and better pricing. We argued that warrants are the best way to play Hearts.
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Hertz’s earnings are strong and it says it plans a “Re-IPO”
Source link Hertz’s earnings are strong and it says it plans a “Re-IPO”