Aggreko forecasts slightly lower year

Temporary power provider Aggreko said its first quarter revenues fell year-on-year, and forecast slightly lower results for the full-year.

In a brief trading update, the company said underlying revenues were down 14% for the first quarter, of which rental solutions revenues slipped 9%. It did not provide exact figures.

It said rental revenues in North America were lower year on year – a combination of soft market conditions and a particularly strong comparator in upstream oil and gas revenues in the same period last year.

Outside North America, Aggreko said the Rental Solutions business grew. It said that, in response to a hydro shortage in Tasmania, it was in the process of mobilising 108MW, which it expected to begin to have a positive impact on its performance from the second quarter.

Meanwhile, Aggreko said Power Solutions Industrial revenues were 10% lower in the first quarter, primarily due to the prior year comparatives including revenues from the European Games.

Elsewhere, it said it continued to see growth in Russia, Middle East and Africa, offset by more difficult trading conditions in Latin America, in particular Brazil and Chile.

Power Solutions Utility revenues were 19% lower than last year. The first quarter of 2015 included revenues from its diesel contract in Panama which ended in June 2015, in addition the previously announced new contract terms in Bangladesh were not effective until the second quarter of last year, which has also affected this year’s first quarter results.

Finally, the company said it had demobilised 108MW from its 263MW of gas-fuelled plants in Mozambique, where permanent power has come on line.

Aggreko said year to date order intake was 486MW (compared to 388MW at the same point last year), including the recently announced three-year diesel contract in Zimbabwe. The first quarter off-hire rate was 11% (2015: 6%), and Aggreko said it expected the full year off-hire rate to be around 30%.

It added that fleet capital expenditure was expected to be around £250 million (€318 million) for 2016, compared to £237 million (€302 million) in 2015.