Mixed results from Aggreko

Temporary power rental company Aggreko’s third quarter results showed healthy growth for its Americas business, but declines in the Asia Pacific and Australia (APAC) region.

In an interim management statement, the company said underlying group revenues grew 6% year-on-year in the quarter ended 30 September, while reported revenues dropped 3% after being hit by adverse currency movements.

Underlying revenues from the Americas business grew 15% year-on-year in the third quarter, while the Europe, Middle East and Africa (EMEA) business grew 4%, and the in APAC business reported a 9% drop in revenues.

The company did not provide figures.

Aggreko said its APAC business had been hit by the slowdown in the mining sector in Australia business, and volume and pricing pressure in Indonesia.

In EMEA, the company said its power projects revenue was flat year-on-year. It said its 120MW contract in Libya was fully operational again after one month interruption, following a review of the security situation.

The EMEA business also acquired Golden Triangle Generators earlier this month –a power rental business in the UK with revenue of around £3 million (€3.8 million).

In terms of business segments, Aggreko said its local business grew 4% in the third quarter, with growth coming from North America, the UK, parts of the Middle East and a number of its newer markets.

However, it said more challenging trading conditions remained in Australia, Brazil and much of Continental Europe for the local business. Regionally, the Americas local business grew 5% and the EMEA business grew 7%, and the APAC business declined 9%.

Meanwhile, the power projects division grew 10% in the third quarter, with order intake standing at 697MW for the year-to-date, up from 530MW for the same period in 2013.

Aggreko said overall fleet capital expenditure for 2014 was expected to come in at around £235 million (€296 million), while it forecast first half 2015 capital expenditure to be in the region of £140 million (€175 million).

“Overall, the group has continued to perform in line with our expectations. As anticipated tougher comparatives mean that growth in the local business will be at a lower level in the second half, but we continue to expect to deliver growth for the year as a whole,” the company said.

“In power projects, year to date order intake is stronger than last year and we are encouraged with the recent progress on contract extensions; however, the market environment continues to be uncertain.

“Overall, we continue to expect underlying trading profit for the full year to be similar to 2013.”