Aggreko forecasts revenue fall in 2013
18 December 2012
Aggreko is forecasting a slightly lower revenue level in 2013 because of a reduction in military-related contracts in Afghanistan, the absence of a major Olympics contract and uncertainty over the renewal of Japanese rental contracts.
The Glasgow, UK-based company said in a trading statement that these items could lead to a £100 million fall in revenues, which may not be offset by the forecast growth in its local rental and international power projects (IPP) businesses in 2013.
There is also some uncertainty surrounding the IPPs business, with Aggreko expecting an impact from the weakening economic trend in emerging markets. “Our previous experience suggests that in these circumstances customers may in the short term be under less pressure to secure additional power generation”, said the company.
In response Aggreko will slow the rate of investment in its rental fleet, with plans to spend around £150 million in the first half of 2013, with further expenditure decided during the second quarter. The company invested £420 million in its fleet this year.
Total group revenues in 2012 are likely to be £1.6 billion, up 13%, with profits before tax and amortisation rising by 12% to around £365 million.
Underlying revenues in its IPP business are expected to grow by about 12% in the fourth quarter, with growth for the year as a whole expected to be around 15%.
Annual revenues for 2012 from the local business are likely to be 24% higher and margins up 2 percentage points to 19%. Europe and Middle East underlying revenues for the year are expected to be up around 5%, North America up by around 15%, and Aggreko International's Local business up by around 19%.