Resilience from Aggreko

Despite reporting a drop in underlying revenues for the quarter ended 30 September, power rental specialist Aggreko has maintained its full-year profit outlook.

In a brief market update, the company said third quarter underlying revenues (adjusted for currency movements) were 7% behind last year.

It said Rental Solutions revenues were down 1% on last year. Aggreko said the on-going weakness in the oil and gas and mining sectors had been largely offset by continued growth in other sectors, such as petrochemical and refining. The company said it also saw a strong temperature control season in North America and Continental Europe.

Power Solutions revenue was 11% lower than the same period last year. Within this, Industrial was 12% higher, including the successfully executed European Games. The company also reported solid growth in its Russian and African businesses. However, the continuing weak economic backdrop in Brazil was having an impact, it said.

Utility revenue in Power Solutions was 21% lower than last year, driven by the previously announced price reduction on Aggreko’s contract extension in Bangladesh, and the off-hiring of its contract in Panama.

Aggreko said it expected to invest around £250 million (€351 million) in its fleet in 2015, up from £226 million (€318 million) last year.

Chief executive Chris Weston said, “Aggreko continues to demonstrate its resilience against a challenging market backdrop and I am pleased that we are maintaining our guidance for 2015 full year profit before tax of between £250 million (€352 million) and £270 million (€379 million).

“Whilst we are at an early stage in delivering the specific actions identified at our business review in August, I am encouraged with the progress we are making which, regardless of the prevailing market conditions, will strengthen Aggreko and position it well for the future.”