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Aggreko revenues up; says FY to be in line with 2017

By Frank Prenesti

Date: Tuesday 13 Nov 2018

Aggreko revenues up; says FY to be in line with 2017

(Sharecast News) - Temporary power provider Aggreko on Tuesday said underlying group revenue for the nine months to end 30 September rose 11% and forecasts full year profits in line with 2017.
Reported revenue increased 7%. The big contributor was its rental business which turned in a 26% rise, helped by hurricane-related work in the US.

In North America revenue was up 32% and reflected particularly strong growth in oil & gas as the group continued to see a recovery in the 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%," Aggreko said.

"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 (golf tournament) 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."

Aggreko's Australia Pacific rental business also saw increased activity in the mining sector and also benefited this year from a 100 MW contract delivering emergency power in Melbourne during its summer.

Power Solutions Industrial underlying revenue was up 11% in the period, supported by the South Korea Winter Olympics.

The company said Latin America and in Eurasian operations performed well with the latter driven by growth in its key sector of oil & gas.

However, market conditions in the Middle East continued to be challenging as a result of the impact of the blockade of Qatar by surrounding Gulf states. Underlying revenue in Africa was also down on the prior year.

Underlying revenue down at the power solutions utility unit was down 14% reflecting lower rates and volume in Argentina and the continuing effect of the off-hires in Zimbabwe, Bangladesh and Japan.

"We remain on track to deliver our guidance of full year profit before tax in line with 2017, excluding the effects of currency," Aggreko said.

It added that it expected to achieve a "small" working capital inflow in the second half with fleet capital expenditure now expected to be around £200m, down from £246m in 2017.

"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," the company said.

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