Commercial vehicle marketplace RB Global’s gross transaction values increased in its commercial construction and transportation sector in the second quarter despite a decline in prices and automotive gross transaction values.
The results were also helped by the increased lot volumes brought about by auctions of bankrupt Yellow Corp.’s equipment.
STATE OF PLAY:
RB Global, parent company of equipment auctioneer Ritchie Bros., saw an increase in lot volumes despite a decline in the average price per lot sold, Chief Financial Officer Eric Guerin said during today’s earnings call.
“The average price per lot sold declined primarily due to asset mix as lot volume growth came from rental and transportation industries, where asset values are intrinsically at lower [average sales prices],” he said. “We also continue to see pricing decline year over year on a mix-adjusted basis. Excluding the impact of the Yellow Corp. bankruptcy, GTV [gross transaction volume] growth in the commercial construction and transportation sector would have been approximately 4%.”
BY THE NUMBERS: RB Global benefitted greatly from the Yellow auctions, more than doubling its commercial and transportation GTV growth, according to the earnings release. For the quarter ending June 30, RB Global reported:
- Commercial construction and transportation GTV increased to $1.6 billion, up 9% year over year;
- Commercial construction and transportation lots sold finished at 118,200, up 40% YoY;
- Total GTV landed at $4.1 billion, down 1% YoY;
- Total lots sold reached 839,500 units, up 1% YoY;
- The total inventory rate rose 320 basis points to 6%.
NOTEWORTHY:
The equipment consignment and auction market continues to normalize following the pandemic, with replacement costs and declining new-vehicle sales likely to reduce demand for RB Global’s services, Chief Executive James Kessler said during the earnings call.
“As business conditions continue to evolve, large fleet owners are evaluating their equipment disposal needs for the remainder of the year,” he said. “The higher interest rate environment and the higher replacement costs are leading some customers within the [North American] region’s business to postpone investments in new equipment, reducing their immediate need for our suite of transaction solutions for their used equipment.”
In terms of new vehicle sales, Daimler reported that the number of trucks sold in North America dropped 5% YoY to 47,900 and incoming orders fell 10.8% YoY, while Traton Group unit sales declined 2.7% quarter over quarter and 5% YoY, according to their respective Q2 earnings.
MARKET REACTION: Shares of RB Global Inc. (NYSE: RBA) were up 9.34% or $6.70 from market open to $78.47 as of market close today. RB Global has a market capitalization of $13.12 billion.
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