UK-based Ashtead reports lower profits after $2 billion charge and struggling US business

Ashtead Group, a British equipment rental firm, announced on Monday that its annual profit would fall below market expectations due to lower emergency response activity in the U.S. The company’s U.S. business is expected to be affected by a more than $2 billion depreciation charge for the year, according to a statement issued by the London-listed company.

The decrease in activity is blamed on a quiet hurricane season and fewer naturally occurring events, such as wildfires. This has resulted in reduced rental revenue growth forecasts for both the group and U.S., with net interest costs expected to amount to about $540 million for the year.

Ashtead competes with United Rentals in the United States and serves construction, emergency response, and entertainment markets in the U.S., UK, and Canada by renting out equipment ranging from diggers to construction tools. However, strikes in the film and television business in Canada have had a longer-lasting effect than anticipated on Ashtead’s operations in Canada and some impact on its Canadian, U.S., and UK businesses in this space.

Sunbelt Rentals, which is Ashtead’s U.S.-based business unit, has reduced its annual rental revenue growth forecast due to the decline in activity caused by natural disasters and labor disputes