Aggreko plc, international leader in the supply of temporary power and temperature control, posted a 23-percent revenue increase for the first half of 2009, with trading profit rising 46 percent.
Total group revenue for the first half of 2009 was £499.8 million (about U.S. $817.2 million), compared with £407.7 million for the first half of 2008. Profit before tax was £106.9 million (about U.S. $175 million), compared with £68.6 million for the year-ago period, a 56-percent jump, while trading profit zoomed from £73.2 million in the year-ago period to £107 million in the first half of 2009.
Aggreko’s biggest improvement was a 40-percent boost in international power projects posting $313.4 million compared with $223.9 million for the first six months of 2008. North America revenue dropped 11 percent from $159 million for the first six months of 2008 to $140.4 million so far this year. Revenues from Europe and the Middle East were essentially flat at £122.1 million (about U.S. $199.6 million) compared with £120.6 million for the same period last year.
“In the first half of 2009, Aggreko delivered another strong performance, despite the difficult economic conditions, producing increased trading margins and returns on capital employed,” said Philip Rogerson, Aggreko chairman. “Our outlook for the full year remains unchanged from previous guidelines, namely that we expect that profits in constant currency will be at similar levels in 2009 to those achieved in 2008. Given that over 70 percent of our earnings are in U.S. dollars, if we achieve this trading performance and if the Sterling:U.S. Dollar rate stays at today’s level for the rest of the year, reported results would show substantial growth over 2008.”
“We expect that conditions in local business will continue to be challenging particularly compared with a very strong second half in 2008 when we had the benefit of both the Beijing Olympics and exceptionally high storm-related revenues in North America,” added Rupert Soames, Aggreko chief executive. “We have deliberately sought to defend and, where possible, increase our market share and we currently have more power on rent in our local businesses than we did a year ago. However, in achieving this, rates have weakened noticeably. Our temperature control business is having a poor summer season in both North America and Europe, with low ambient temperatures and few customers suffering the capacity constraints which drive demand for additional cooling.”
Soames added that the company has been awarded some sizeable new international projects, including 140 MW in Kenya and 100 MW in Saudi Arabia. “Project extensions continue to run at a healthy rate, but converting enquiries for large new projects into finalized contracts remains difficult in many territories. During the second half of 2008, we significantly increased the amount of MW on rent, but, as expected, net increases during the first half have run at more modest levels. We anticipate that net additions on rate in the second half will continue at this lower rate.”
Soames said Aggreko expects business to grow year over year in the second half but at a slower pace than in the first half.
In other Aggreko news, the company last week said it has opened a 5,000-square-foot service center on a two-acre property in Indianapolis. The new facility will handle all aspects of Aggreko’s business, including rental, sales and service.
Aggreko, based in Scotland with U.S. headquarters in Houston, is No. 10 on the RER 100.