Aggreko boosted by Ryder Cup, Winter Olympics

Glasgow-based Aggreko, the world’s largest temporary power firm, on Tuesday published a trading update for the nine months to September 30, 2018. 

Aggreko said underlying group revenue for that period was up 11% on last year, with reported revenue up 7%.

The firm said its “rental solutions” business, 52% of the group, saw its underlying revenue rise 26% on the prior year and 24% excluding hurricane-related work in North America. 

For that division, Aggreko said: “In North America revenue was up 32% and reflected particularly strong growth in oil & gas as we have continued to see a recovery in this sector from the prior year levels.

“Excluding the impact of hurricane-related work, which continued from last year through the first half of 2018, revenue was up 27%. 

“Our Continental Europe business had a good nine months with growth in most countries, most notably the Netherlands and Belgium, as well as benefiting from the Ryder Cup in France in September. 

“Our Northern Europe business has also delivered good growth, driven by our Next Generation Gas contracts in Ireland and an increase in activity in the oil & gas sector, as well as revenue from the Glasgow Games.  

“Finally, our Australia Pacific business has seen increased activity in the mining sector and also benefited this year from a 100 MW contract delivering emergency power in Melbourne during its summer.”

Aggreko said its “power solutions industrial” business, 27% of the group, saw underlying revenue rise 11%.

For that division, Aggreko said: “This year’s performance was supported by the South Korea Winter Olympics, excluding which underlying revenue was up 2%. 

“We have performed well in Latin America and in Eurasia, with the latter driven by growth in its key sector of oil & gas

“Market conditions in the Middle East continue to be challenging as a result of the impact of the Qatar blockade, and underlying revenue in Africa is also down on the prior year.”

However, Aggreko said its “power solutions utility” business, 21% of the group, saw underlying revenue fall 14%.

For that division, Aggreko said: “Power Solutions Utility underlying revenue declined 14%, as expected, reflecting lower rates and volume in Argentina and the continuing effect of the off-hires in Zimbabwe, Bangladesh and Japan.”

Aggreko added: “We remain on track to deliver our guidance of full year profit before tax in line with 2017, excluding the effects of currency …

In terms of the group’s cash performance, we expect to achieve a small working capital inflow in the second half and our fleet capital expenditure is now expected to be around £200 million (2017: £246m), as we continue to focus on improving our asset utilisation. 

“The group’s financial position remains strong and we continue to expect year end net debt/EBITDA of between 1.2 and 1.3 times.”