Avis Budget Group Profits Dip in Q2 2013
In second quarter 2013, Avis reports an increase in revenue compared to the same period last year, primarily due to the acquisition of Zipcar and a 3% growth in rental days. Higher U.S. fleet costs played a role in the decline of corporate EBITDA.
Avis Budget Group Inc. reported second quarter 2013 worldwide revenues of $2 billion, a 7% increase compared with second quarter 2012. This is mainly due to the acquisition of Zipcar and a 3% growth in rental days.
Excluding certain items, corporate EBITDA declined 33% to $179 million, primarily due to higher U.S. fleet costs, according to Avis. The company reported a net income of $58 million and a GAAP net loss of $28 million — due to debt-extinguishment expenses, transaction-related charges and restructuring costs.
"Our second quarter results reflected volume growth in all regions and increased pricing in North America, offset by the significant year-over-year increase in North American fleet costs occasioned by the significant car-sale gains and depreciation adjustments recorded in the comparable quarter of last year," said Ronald L. Nelson, Avis Budget Group chairman and chief executive officer. "Going forward, we expect volume and pricing trends in North America to remain favorable and fleet costs to stabilize. In addition, summer trends in Europe are also favorable, while the integration of Zipcar continues to progress as planned, with both cost savings and incremental revenue opportunities being realized."
With the recent acquisition of Payless Car Rental in July — which generated approximately $80 million in annual revenue in 2012 — Avis Budget Group is given a significant position in the deep-value segment of the car rental market.
In 2013, the company expects to generate worldwide revenues of approximately $7.8 billion to $8 billion, a 6% to 9% increase compared to 2012. When it comes to adjusted EBITDA, the company anticipates it to be about $750 million to $800 million, excluding certain items.
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