Aggreko’s Third Quarter in Line with Expectations

Oct. 28, 2013

Aggreko plc, the world leader in the supply of temporary power and temperature control, said trading in the third quarter was in line with expectations, with underlying group revenues and trading margins slightly ahead of the same period. In its interim management statement covering the period, Aggreko said “underlying” in this case excludes £37 million (about U.S. $59.8 million) of revenues from the London Olympics recognized in the third quarter of 2012, along with pass-through fuel and the impact of currency movements. On a reported basis, revenues decreased by 6 percent and trading margins were a little lower than the year-ago period.

On an underlying basis, the Americas region grew revenues by 6 percent, while Asia, Pacific and Australia was 17-percent lower than last year, largely the result of “off hires” in the past 12 months in Japan and Indonesia. Europe, Middle East and Africa grew 8 percent aided by full production from Aggreko’s 430 MW of gas contracts in Mozambique and Cote d’Ivoire.

Local business revenues increased 4 percent on an underlying basis in the third quarter, with underlying margins ahead of last year. Local business in the Americas performed particularly strongly, Aggreko said, with revenue growth of nearly 10 percent, while APAC and EMEA were flat in the face of softer conditions in Australia, and the absence of two large contracts in Cyprus and Oman, which ran through the third quarter of 2012.

Power projects revenues in the third quarter dropped 2 percent on an underlying basis, with trading margins slightly behind last year’s numbers. Third-quarter order intake was at similar levels to the previous year at 105MW, which includes a 50 MW contract to supply power to Guinea. At the end of the third quarter order intake stood at 502 MW. The company recently agreed with its Japanese customer to further extend its 150 MW contract, which was due to come off rent in September.

In October, Aggreko signed another contract for a 20 MW HFO plant in Africa, taking the company’s total heavy fuel oil contracts in the Power Projects and Local business to more than 110 MW.

Net debt decreased for Aggreko by £83 million in the third quarter and stood at £469 million. The company has decreased its debt by £216 million since the end of the third quarter of 2012.

The company expects the Local business to perform well for the rest of the year, with underlying revenues and margins to top the second half and full year of 2012. In Power Projects, Aggreko expects underlying revenues in the second half to decrease slightly compared to 2012, but higher than the first half of 2013.

Aggreko expects to spend about £230 million (about U.S. $371.5 million) in 2013, and to invest about £140 million in the first half of 2014, reflecting the continued growth of Local business and further investment in the company’s gas and HFO fleets.

For 2013, Aggreko expects its group profit before tax to be in line with market expectations.

Aggreko, based in Scotland with U.S. headquarters in Houston, is No. 5 on the RER 100.