Avis Budget Group, Inc. reported today the results for its first quarter, which ended March 31, 2010. The company’s revenue decreased by 3 percent, the equivalent of US$1.2 billion.
This represents a pretax loss of US$66 million, including a US$40 million expense related to the early extinguishment of corporate debt. Excluding unusual items, first quarter EBITDA was US$39 million and pretax loss was US$25 million, compared with an EBITDA loss of US$3 million and a pretax loss of US$63 million in the prior year first quarter.
“Our price increases and cost-saving initiatives allowed us to grow our EBITDA and margins in the first quarter as we continued our focus on profitable rental transactions and keeping our fleet size in line with demand,” said Ronald L. Nelson, Avis Budget Group chairman and chief executive officer. “Importantly, each of our operating segments reported a year-over-year improvement in EBITDA, and volume comparisons strengthened each month during the quarter and again in April, led by an improvement in business travel. We continue to be optimistic about our earnings potential for the year.”
In the first quarter, total car rental revenues decreased 4 percent year-over-year, driven primarily by a 12 percent decrease in rental days offset by a 7 percent increase in average daily rate. Both commercial and leisure rentals contributed positively to the gain in average daily rate. In addition, domestic ancillary revenue increased 12 percent in the quarter on a per-rental-day basis.
Excluding the effects of foreign currency, average daily rate increased 3 percent. Car depreciation costs decreased 17 percent due to a 7 percent reduction in per-unit depreciation costs and an 11 percent decline in the company’s average fleet. Excluding gas, other operating expenses decreased 40 basis points to 51.4 percent of revenue, principally reflecting cost-saving and productivity improvement initiatives. Selling, general, and administrative costs declined US$4 million compared to the prior year, excluding the effects of foreign currency, reflecting cost savings and productivity improvements.