Aggreko reviews oil & gas fleet in North America
By Murray Pollok16 November 2016
Aggreko said it was on course to meet market expectations for the full year, with pre-tax profits of around £225 million, although the business is facing difficulties in oil and gas markets in North America and uncertainties over new contracts in Argentina.
In its trading update covering the three months to 15 November, Aggreko said its Rental Solutions business revenues were down 7% with a decline in North America caused by weakness in upstream oil and gas. The company is now reviewing the book value of its specialist oil and gas fleet, such as small gas generators.
The company is in the process for bidding for continued work in Argentina, where it has been very active since 2008, with 270 MW of standby contracts and 180 MW of fixed contracts. Aggreko has tendered for new contracts and these will be announced in the coming months.
The Rental Solutions business outside North America performed better, with growth in both Europe and Australia Pacific.
In technology, Aggreko said its next generation gas and HFO (heavy fuel oil) products were in field trial on customer sites and that it was talking to customers about its solar/diesel hybrid product.
The company has meanwhile approved the implementation of a new CRM system and website, which will be launched in phases beginning this month.
Chris Weston, Aggreko’s Chief Executive, said; “Whilst the environment over the last nine months has been challenging I am pleased with our strong order intake of over 1GW and with the progress that we are making on the implementation of our business priorities.
“We are working through the status of our contracts in Argentina and continue to navigate the tough conditions in upstream oil and gas in North America.
We expect the 2016 full year results to be broadly in-line with current market expectations, with pre-exceptional profit before tax of around £225 million. I am confident that our continued focus on delivering our priorities is creating a stronger and more resilient Group for the future."