Car
rental demand has held steady even as the Covid-19 delta variant has
spread, Hertz Global Holdings president and CEO Paul Stone noted in
pre-recorded commentary released Monday.
"While uncertainty
remains due to new Covid variants, the rental car industry was among the
first to see signs of the rebound, as people felt more comfortable
travelling in a rental car where they had more control over their
experience," Stone said in the commentary, released in conjunction with
Hertz's second-quarter earnings report.
Last week, Avis similarly reported in its earnings call that the variant had not handicapped its quarterly bookings.
For
second quarter of 2021, Hertz generated revenue of $1.9 billion, up 62
per cent from the first quarter, the company reported. The quarter-over -quarter uptick reflected strong leisure travel demand coupled with
tighter fleet inventory management, according to the company.
Like Avis, Hertz is doing its best to maintain fleet availability amid a global chip shortage affecting
rental car availability, which it expects to continue into next year.
"We are working closely with our valued [auto manufacturer] partners to
navigate the ongoing chip shortage that we expect will continue into
2022," said Stone. "We anticipate headwinds such as continued fleet
capacity constraints and higher maintenance costs. On the flip side, as
tailwinds we anticipate sustained and improved industry yields and
strong residual market values."
Adjusted second-quarter corporate
earnings before interest, taxes, depreciation and amortization amounted
to US$639 million, a 34 per cent margin. Hertz attributed the improvement
to strong revenue, efficient fleet management and over $400 million of
structural and recurring cost reduction. Net loss totaled $168 million,
which includes $633 million in reorganization expenses.
Hertz completed the Chapter 11 restructuring process on
June 30. The car rental company anticipates a public offering,
including an investor roadshow and relisting on a major exchange by the
end of 2021.
"Hertz delivered an outstanding second quarter as
travel continued to rebound," said Stone. "With resurgent demand and
tight supply across the industry, we remained agile in managing our
fleet to meet customers' needs. At the same time, we benefited from the
important operational and financial improvements we made through our
restructuring process."
RELATED: Hertz Q1 Earnings