Temporary power provider Aggreko has reported flat results in its rental division in 2015, with strength in the petrochemical, refining, and events rental sectors offset by declines in oil and gas rental revenues.
Aggreko’s Rental Solutions business reported 2015 revenues of £618 million (€800 million), compared to 2014’s figure of £616 million (€797 million). Trading profit at the unit stood at £100 million (€129 million) last year, down from £107 million (€138 million) in 2014.
Aggreko said its Rental Solutions business had also seen strong growth in temperature control and had acquired ICS, a specialist heating business, during the year. It said the business had continued to generate good margins and returns, despite a challenging year.
Group-wide, revenues were down 1% year-on-year in 2015 to £1.56 billion (€2.02 billion), while trading profit slipped 12% to £244 million (€316 million).
For 2016, Aggreko said its Power Solutions Utility business had started the year with a strong order book; a healthy prospect pipeline; 140MW of new orders; and the signing of a two year extension of its 148MW of diesel contracts in Japan.
Aggreko said it expected the level of contracts off-hiring in the year to go back up to a more normal level, of around 30%. But it added that, due to the timing of contract start and end dates, there would be a reduction in first half profits at a group level. It said it would continue to monitor the geopolitical situation in Yemen, Libya and Venezuela.
In the Power Solutions Industrial business, Aggreko said it was seeing softer trading conditions in Singapore and some of its markets that are more exposed to the mining sectors. However, the company said year-to-date power volumes were up on the prior year, driven by continued good performances in the Middle East, Russia and Africa.
And Aggreko said the Rental Solutions business unit, in particular the North American business, had seen a slow start to 2016 following a lower run rate exiting 2015 than had been expected. The company said it was cautious on its outlook for this part of its business.
At a group level, Aggreko said it expected to invest around £250 million (€194 million) in fleet capital expenditure in 2016. It said investment would be focussed on its more fuel efficient gas and diesel engines; and added that it would flex this spend according to market conditions.
Overall, the company said it expected profit before tax and exceptional items to be slightly lower than 2015.