UK temporary power provider Aggreko recorded mixed third-quarter results, with its Argentinian operations impacting on its performance.
Most notably, its Power Solutions Utility segment revenues dropped 15% year-on-year, driven by repricing and off-hires in Argentina. However, excluding the impact of Argentina, the company’s revenues in this sector still dropped 7%.
As a result of Aggreko’s recent announcement, the company’s share price fell 11% this morning (21 November, 2018), with fears of struggles in Argentina set to continue.
The company’s off-hire rate for the first three quarters of the year was 24%, and Aggreko said it expected its full-year off-hire rate to be in line with its historic average of around 30%.
The company also expects to see continued delayed payments from some customers, particularly in Africa where liquidity remains a challenge.
Aggreko’s Rental Solutions business grew 9% year-on-year, however, including revenue from the hurricanes that impacted on Southern US and Caribbean. In North America, revenues grew 10% in its Rental Solutions segment. The wider Rental Solutions business also contributed to growth with a strong performance in Europe, particularly in UK utility sector, and a solid performance in Australia Pacific, with increased activity in the mining sector, said the company.
Aggreko invested €45 million in July, acquiring the US technology company Younicos, and the company said its integration was progressing well, citing a “healthy pipeline of opportunities” ahead.
The outlook for the full year remains unchanged, the company said, with its capital expenditure expected to be around £300 (€338.14 million).