Aggreko, world leader in power generation and temperature control technology, posted a 4-percent hike in underlying revenue for 2013, although revenue declined less than 1 percent from £1.583 billion in 2012 to £1.573 billion (about U.S. $2.63 billion) in 2013.
Aggreko increased underlying trading profit in the Americas by 20 percent and in Europe, the Middle East and Africa by 14 percent in 2013. The overall results reflect lower revenues from military jobs and Japan, as well the increased revenue in 2012 from the London Olympics, which provided £60 million in revenue in 2012.
Local business increased 7 percent in the Americas and EMEA, while trading profit jumped 11 percent. Power projects trading was subdued, the company added, with an order intake of 725 MW in 2013, similar to 2012, with margins dropping 2 percent.
Strong cash generation resulted in a decrease in the company’s debt load.
Rupert Soames, Aggreko CEO, is stepping down after 11 years, as was previously announced. Angus Cockburn, group chief financial officer, will take over as interim CEO, and group director of finance, was named interim CFO.
Overall the company’s revenues were viewed as being in line with expectations.
“After nine consecutive years of growth, 2013 proved to be a challenging year,” said Aggreko chairman Ken Hanna. “Despite this, Aggreko delivered a creditable performance and good progress on many fronts. Our Local business delivered underlying revenue growth of 7 percent and margins strengthened; trading in our Power Projects business was, however, more challenging, with underlying revenue at similar levels to last year and margins a little lower. As a result of a disciplined approach to capital expenditure, we generated strong cash flow and net debt reduced by £230 million; I am therefore delighted that we can announce a £200 million return of cash to shareholders as well as a 10 percent increase in the dividend. Overall, since we last reported in December, the business has performed in line with our expectations."
Hanna was a bit more optimistic in discussing the company’s expectations for 2014. “For the full year we expect trading profit to be similar to 2013 on a constant currency basis, as growth in the Local business is offset by weaker trading in Power Projects. However, the latest spot rates for some of our major trading currencies have moved against the average exchange rates of 2013; if these rates pertain for the rest of the year, we would see a marked translational impact on our 2014 reported results."
Aggreko, based in Scotland with U.S. headquarters in Houston, is No. 5 on the RER 100.