Mixed picture for Aggreko

Aggreko has grown its North American rental business in the first nine months of 2019 despite a reported softening of the market since the middle of the year. In Europe, rental growth in continental Europe was offset by a 14% drop in revenues in Northern Europe.

The power specialist’s trading update for the first nine months of the year showed a varied performance across its operations, with a 2% drop in overall group revenues year-on-year for the period.

Its Rental Solutions business, which accounts for 53% of sales, saw revenues fall by 1%. In North America, which represents 60% of this business, underlying revenues were up 4%. Good growth was seen in most key sectors, despite a softening in the market since the middle of the year.

Growth of 8% in rental revenues in Continental Europe were offset by a weaker performance in Northern Europe - 14% down - where business was dampened by general market uncertainty.

Good growth in the Australia mining sector was not enough to prevent a drop in Rental Solutions revenues in Australia Pacific, where the period was impacted by the ending of a 100MW emergency utility sector contract.

Aggreko’s Power Solutions Industrial divsion - representing 27% of group business - saw revenues in line with the same period in 2018. Sales were up 7% after excluding the 2018 Winter Olympics and the early revenues for the Tokyo 2020 Olympics.

At Power Solutions Utility, revenues were down 7%, with average megawatts on hire down 9% at 2,445MW. 

Looking ahead to the full year, Aggreko said it expected its performance to be in line with market expectations.

Heath Drewett, Chief Financial Officer of Aggreko, said, “Guidance on fleet capex is unchanged at below £200 million, which will include around £30 million on the Tokyo Olympics spend.”

The company remains on track to deliver a mid-teens return on capital employed in 2020.