RB Global performance slips amid market uncertainty
Q1 commercial construction, transportation GTVs down 18% YoY
Commercial vehicle marketplace RB Global saw a decline in commercial construction and transportation gross transaction values and lot volumes in the first quarter as market conditions worsened.
State of play
RB Global benefited from auctions of bankrupt Yellow Corp.’s equipment, which helped minimize the effects of declining gross transaction values (GTV) and lower average selling prices (ASPs), Chief Financial Officer Eric Guerin said during today’s earnings call.
For the commercial construction and transportation (CC&T) segment, lot volumes declined 6% year over year, excluding the impact of the Yellow bankruptcy, he said.
“Asset mix tailwind stemmed the decline in lot volume from the rental and transportation industries, where asset values are intrinsically at lower ASPs,” he said. “Excluding the impact of the Yellow Corp. bankruptcy from the prior period, the GTV decline in the commercial construction and transportation sector would have been approximately 14%.”
Meanwhile, tariffs and market uncertainty further drove down CC&T performance, Guerin said.
“In combination with a shift in trade policies, uncertainty in the end markets is causing customers and partners to take a wait-and-see approach to disposition,” he said. “The average price per lot sold increased primarily due to an improvement in asset mix partially offset by continued deflation in asset values.”
By the numbers
RB Global CC&T gross transaction values and lot volumes declined in Q1, although inventory sales revenue and total revenue remained positive, according to the earnings release.
For the quarter ending March 31, RB Global reported:
- Total revenue of $1.1 billion, up 4.1% YoY;
- Inventory sales revenue of $256.1 million, up 18.8% YoY;
- Commercial construction and transportation GTV of $1.3 billion, down 18.2% YoY;
- Commercial construction and transportation lots sold of 87,600, down 19.5% YoY;
- Total GTV landed at $3.8 billion, down 6.1% YoY;
- Total lots sold reached 855,100, up 1.9% YoY; and
- Total inventory rate fell 60 basis points to 8.2%.
Noteworthy
RB Global, parent company of equipment auctioneer Ritchie Bros., announced the acquisition of Montgomery, Ala.-headquartered auctioneer J.M. Wood for $235 million, with the company expecting the transaction to close during the second quarter, Chief Executive James Kessler said during the call.
“This move enhances our geographical coverage Alabama and adjacent states and brings a talented team of sales professionals with deep local relationships on board,” he said. “They primarily focus on commercial construction and transportation assets and have a strong footprint with municipal customers.”
RB Global also continues to support its network in facing the current geopolitical market concerns, Kessler said.
“Moving to the CC&T end markets, while our customers and enterprise partners exercise caution amid ongoing uncertainty, we continue proactively investing in our future by focusing on controllable factors that drive growth while improving operational efficiencies,” he said. “This includes having the most comprehensive network of territory managers while continuously implementing new programs to improve productivity.”
MARKET REACTION: Shares of RB Global Inc. (NYSE: RBA) were up 2.48% or $2.54 from market open to $104.81 as of market close today. RB Global has a market capitalization of $18.93 billion.
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