RB Global commercial construction, transportation revenue up 17%
Total inventory rate declined 6.2 percentage points bps
Commercial vehicle marketplace RB Global’s gross transaction values increased in its commercial construction and transportation sector for the fourth quarter and full-year 2023 as lot volumes grew despite prices declining.
BY THE NUMBERS: RB Global, the parent company of equipment auctioneer Ritchie Bros., also posted growth in lots sold, according to the company’s earnings release. For the quarter ending Dec. 31, 2023, RB Global reported:
- Commercial construction and transportation pro forma gross transaction values (GTV) landed at $1.4 billion, up 20% year over year;
- Commercial construction and transportation pro forma lots sold increased to 86,900, up 28.4% YoY;
- The pro forma total inventory rate declined 6.2 percentage points YoY to 5%.
For the full year:
- Commercial construction and transportation pro forma GTV landed at $5.6 billion, up 17.3% YoY;
- Commercial construction and transportation pro forma lots sold increased to 331,600, up 32.1% YoY;
- Pro forma total inventory rate declined 4.9 percentage points YoY to 5.9%.
WHAT THEY’RE SAYING:
Following concerns over customer losses in the third quarter, RB Global rebounded in the fourth quarter providing reason for optimism, according to equity research firm William Blair‘s research note.
“Overall, we were encouraged by RB Global’s strong [GTV] growth across both businesses and progress on operational efficiency in the fourth quarter,” according to the research note. “Despite the disappointing customer loss announced after the third quarter, RB Global continues to execute on both improving its [service lease agreement] performance and streamlining its operations.”
STATE OF PLAY: While the company’s gross transaction value and lot sales growth were good news, the price declines affecting the construction and transportation industries impacted operations, Chief Financial Officer Eric Guerin said during the company’s Feb. 23 earnings call.
“Part of the decline in the average price per lot sold was due to asset mix, as lot volume growth came from rental and transportation customers, where asset values are intrinsically at lower average selling prices compared to traditional earthmoving assets,” he said. “Additionally, we continue to observe declines in price year over year on an apples-to-apples basis.”
NOTEWORTHY:
Former Ritchie Bros. Chief Executive Ann Fandozzi resigned from the RB Global board of directors on Feb. 21, citing the company’s prioritization of short-term cost savings over long-term success, concerns regarding loss of talent and certain customer relationships, and lack of broader leadership, according to a copy of her resignation email included in the company’s 8-K filing with the Securities and Exchange Commission. Fandozzi cited the loss of USAA as a customer as one of her concerns.
She also had concerns about being excluded from important meetings, she wrote.
“In addition, I believe I have been precluded from carrying out my fiduciary responsibility by being expressly forbidden to attend any committee meetings and executive sessions where key discussions and decisions are made,” she said in the email.
MARKET REACTION: Shares of RB Global Inc. (NYSE: RBA) were up 0.52% from market open to $77.13 as of market close today. RB Global has a market capitalization of $14.03 billion.
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