North America buoys Aggreko's third quarter

Aggreko’s revenues for its third quarter were down 6% year on year with a 17% fall in its Asia, Pacific and Australia (APAC) region offsetting a 6% increase in the Americas. African contracts helped boost revenues in Europe, Middle East and Africa by 8%.

Underlying revenues, excluding the one-off impact of the London Olympics, which generated £37 million in revenues, were “slightly ahead” of the same period in 2012.

Sales in APAC were hit by off-hires in Japan and Indonesia, while the company’s local businesses were up 4% overall, with a 10% increase in North America helping overcome flat conditions in the EMEA and APAC regions.

A feature of the quarter was the increased rate of conversion of its G3 diesel generator sets into HFO (heavy fuel oil) and higher-efficiency G3+ sets. Aggreko is converting 36 units a month and HFO contracts now amount to 110 MW of power with six customers.

In its interim management statement, covering the three months to 30 September, Aggreko said; “On an underlying basis we expect that the local business will continue to perform well; we expect underlying revenues and margins to be ahead of the prior year both in the second half and on a full year basis.”

It said power project revenues to be slightly down in the second half of the year, but higher than the first six months of 2013 “with increased revenues from our gas projects offsetting reduced revenues from military and Japan.”

The company’s high fleet capital expenditure will continue, with £230 million spent in total this year and £140 million anticipated in the first six months of 2014. This reflects “the continued growth of our local business and further investment in our gas and HFO fleets.”