Aggreko predicts full year revenues up 3% but profits flat

PORTABLE power group Aggreko has predicted full year group revenues are likely to be 3% above last year, with trading profits at a similar level to 2012.

The group, which has its UK base in Cannock, said in a pre-close update that reported revenues for the year were expected to be around £1.57bn, similar to last year, and pre-tax profit likely to be at least £335m.

Underlying revenues for the year are expected to grow by around 8% in the Europe, Middle East and Asia (EMEA) regions and in the Americas by around 7%.

Revenues in its Power Projects business are expected to be around 2% lower than last year on both an underlying and reported basis.  As anticipated, underlying trading margins for the year are likely to be down on prior year at around 30%.  Order intake for the year to date is over 700 MW.  

It said it had signed a six-month 80 MW diesel contract in Panama, under which it will provide power as a licenced generator to the Panamanian wholesale electricity market; this is thought to be the first time that a temporary power supplier has entered a country’s wholesale electricity market competing with permanent power generators.  

The group has also signed a number of smaller contracts in the quarter, including two HFO contracts, and it has recently received a further three-month extension on its 150 MW of diesel contracts in Japan to the end of the first quarter of 2014.   
 
The Local business is said to be on track to deliver a good full year performance with underlying revenues expected to be around 6% higher than the prior year and underlying margins expected to be slightly ahead of last year.  Reported revenues are expected to be flat on the prior year, reflecting the impact of the London Olympics.  

The group said it had been chosen as the supplier of temporary power for the 2014 FIFA World Cup and the Glasgow 2014 Commonwealth Games.

It now expects to take delivery of about £15m of ancillary fleet items in early 2014 rather than late 2013.  As a result, fleet capital expenditure is expected to be around £215m in 2013 and in the region of £155m in the first half of 2014.

Strong cash generation, mainly driven by lower capital expenditure, is expected to reduce net debt by around £200m compared with 2012, with resulting net debt likely to be below £400m at the year end.