Profits up as Aggreko ‘de-risks’ business

Aggreko has exited 25 countries since the end of 2021 as it seeks to de-risk its business. At the same time, it is reducing its reliance on small contracts (under US$10,000) and increasing its business with bigger customers in Europe and North America.

The power and temperature control specialist reported a 16% increase in its revenues for the year to 31 December 2023, with EBITDA profit up 33% to $950 million.

Aggreko’s 60 kVA battery storage unit, one of a new range now available.

The shift away from small and higher-risk projects has led to an increased focus on Europe and North America, where around 62% of its revenues are now generated. These two regions have seen +30% growth over the past two years, with the Middle East also in that high-growth category.

Last year saw its Latin American operation report growth of 17%, compared to 12% for both Europe and North America. Sales in the Middle east declined 9% year-on-year because of the impact of the 2022 Qatar World Cup, while revenues in Africa fell by 10%, impacted by some of the country exits and off-hires in Malawi, Chad and Mali.

Aggreko’s parent company has also taken the decision to sell its Eurasian business – Russia and Kazakhstan – to its ultimate private equity owners following regulatory difficulties in Russia concerning any sale to a local third party.

The business continues to invest in its fleet, with the $559 million spending last year 57% higher than in 2022. It said 70% of this was for products related to the energy transition, with 68% invested in Europe or North America. This includes the acquisition of community solar projects in the US.

The business had an average of 5,312 MW of power on hire during 2023, with fleet released from Bangladesh and Africa now moving to where it is needed. Power revenue represents around half of all Aggreko’s revenues.

Aggreko agrees Russian divestment with private equity owners Deal will see ownership transferred to ultimate owners