Tasmania power crisis to boost Aggreko Q2

A hydro power shortage in Tasmania could help Aggreko's second quarter performance

Glasgow-based international mobile power provider Aggreko said its underlying revenue for the first quarter was 14% behind last year — but a hydro power shortage in Tasmania could help its performance in the second quarter. 

Aggreko chief executive Chris Weston said: “Performance in this first quarter has been in line with our expectations.

“Whilst some of the markets we operate in continue to be challenging I am encouraged by the order intake to date.

“Our guidance for the full year, of profit before tax slightly lower than 2015, remains unchanged.”

In a trading update, Aggreko said its “rental solutions” revenue was down 9% on last year.

Its rental evenues in North America were lower year on year but the business grew in other regions of the world.

” … in response to a hydro shortage in Tasmania, we are in the process of mobilising 108MW, which will begin to have a positive impact on our performance from the second quarter,” said the firm.

Aggreko’s “Power Solutions Industrial” revenue was 10% lower, “primarily due to the prior year comparatives including revenues from the European Games.”

Elsewhere, “Power Solutions Industrial” continued to see growth in Russia, Middle East and Africa “offset by more difficult trading conditions in Latin America, in particular Brazil and Chile.”

The firm’s “Power Solutions Utility” revenue was 19% lower than last year.

“The first quarter of 2015 included revenues from our diesel contract in Panama which ended in June 2015, in addition the previously announced new contract terms in Bangladesh were not effective until the second quarter of last year, which has also affected this year’s first quarter results,” Aggreko explained.

“Finally, as noted at the time of the full year results announcement we have demobilised 108MW from our 263MW of gas-fuelled plants in Mozambique, where permanent power has come on line.

“Year to date order intake is 486MW (14th May 2015: 388MW), including our recently announced 3 year diesel contract in Zimbabwe.

“The quarter one off hire rate was 11% (2015: 6%).  We continue to expect the full year off-hire rate to be around 30%. The geopolitical situation also remains challenging in Yemen and Venezuela.”

Aggreko expects its fleet capital expenditure to be around £250 million (2015: £237 million), in line with the guidance issued at the full year.

Concluding its outlook, Aggreko said: “As indicated at our full year results in March, the timing of contract start and end dates will have an impact on first half year on year profitability. 

“Overall the guidance of slightly lower year on year profit before tax and exceptional items on a constant currency basis remains unchanged.”