Aggreko to make record £320m investment in 2011
By Murray Pollok10 March 2011
Aggreko is to invest a record high of £320 million in its fleet in 2011 following another year of revenue and profit growth. Sales for 2010 grew by 20.1% to £1.23 billion and trading profit by 23.3% to £314.5 million.
The company invested £254 million in its fleet in 2010 and said that capital expenditure was expected to reach £320 million this year because of an increase in the rate of investment in its gas powered generators and expansion of its ‘local' depot network internationally.
The increased investment comes as Aggreko continues to expand its business globally. Revenues in North America increased by 21.3% to US$380.1 million - helped by the Vancouver Olympic Games contract - and its international local rentals operations grew by 70.9%, helped by the World Cup (revenues of £48 million) and the Asian Games (£20 million).
Growth in Europe and the Middle East was more modest, at 5.5% to £261.8 million, reflecting generally lower rates of economic growth.
The international power projects business reported revenues up 7.6% to $711.5 million, with around three quarters of the business coming from the utilities sector. The company now has 3600 MW in its fleet, which is 19% higher than the same time last year, and the gas powered fleet is 30% larger. The division has 1025 MW on rent in Africa and the Middle East, 833 MW in Asia and 657 MW in Central and South America.
Philip Rogerson, Aggreko's chairman, said; "The current instability in some countries in the Middle East and Africa makes the task of predicting the outcome for the year more than normally difficult. Our global scale and diversification of risk exposures will be helpful as we manage through this period of uncertainty, and we anticipate that for the year as a whole trading profit in 2011 will be at a similar level to 2010.
"Allowing for currency movements and the £87 million of major events revenue in 2010 which will not recur in 2011, this would represent underlying growth of around 15%."
Rupert Soames, chief executive, said the "hat-trick" of major events in 2010 - World Cup, Asian Games and Vancouver - allowed the company to deliver strong earnings growth in 2010; "We go into 2011 with strong momentum, a record order book in International Power Projects, and continued strong demand driven by the world-wide shortage of power."