Strong pound continues to impact performance for Aggreko
PORTABLE power supplier Aggreko has said it business continues to be impacted by the strong pound despite strong trading over the past quarter.
The company, whose UK administrative base is in Cannock, said in a market update that trading since its interims in August had been in line with expectations.
“Underlying group revenue in the third quarter was 6% ahead of the same period last year, with reported revenues significantly impacted by adverse currency movements, decreasing by 3%,” it said.
The Americas business was said to have grown at a healthy 15% year on year in Q3, despite a slow temperature control season for its North American business. Its Europe, Middle East and Africa (EMEA) business grew 4%, with the local business continuing to deliver growth. EMEA Power Projects revenue was flat year on year, with a comparative which included over 200MW of gas capacity coming online in Mozambique and Cote d’Ivoire. In addition, its 120MW contract in Libya is now fully operational again after a month-long interruption, following a review of the security situation. In Asia, Pacific and Australia (APAC) revenue was 9% lower, reflecting the impact of the slowdown in the mining sector on its Australian business, and volume and pricing pressure in Indonesia.
The Local business grew 4% in Q3 which, as was expected, was not as strong as H1 given the strong comparative.
It said it continued to deliver year on year growth in North America, the UK, parts of the Middle East and a number of our newer markets; however, more challenging trading conditions remain in Australia, Brazil and much of Continental Europe. Regionally, the Americas business grew 5% and the EMEA business grew 7%, while the APAC business declined 9%.
Its Power Projects division grew 10% in the quarter, which had been anticipated. Order intake for the year to date is said to be stronger than last year at 697MW (2013: 530MW). This includes a new 104MW eight month diesel contract in Panama following a competitive tender process.
Net debt at September 30, 2014 was £511m, a decrease of £26m in the three months since the end of June. This is after £200m was returned to shareholders in June 2014 and compares to net debt of £469m at September 30, 2013.
Overall, the group said it had continued to perform in line with expectations.
“As anticipated tougher comparatives mean that growth in the Local business will be at a lower level in the second half, but we continue to expect to deliver growth for the year as a whole. In Power Projects, year to date order intake is stronger than last year and we are encouraged with the recent progress on contract extensions; however, the market environment continues to be uncertain,” it said.
It has predicted fleet capital expenditure in 2014 to be around £235m, with first half 2015 capital expenditure likely to be in the region of £140m, in part reflecting product mix.
Overall, it said it continued to expect underlying trading profit for the full year to be similar to 2013.
