Aggreko 2015 profit drops as it warns over first half

FTSE 250 temporary power provider Aggreko reported a drop in profit for 2015 and warned profit was likely to be lower in the first half of this year due to the timing of contract start and end dates.

For the year to the end of December, pre-tax profit fell 13% to £252m, at the lower end of the company’s guidance of between £250m and £270m, as it took a hit from weak oil prices, slower payments in two of its markets and a price reduction on a contract extension in Bangladesh.

Still, profit was ahead of consensus of £247m and Nomura’s estimate of £239.3m.

After exceptional items, pre-tax profit dropped to £226m from £289m.

Revenue was largely flat at £1.6bn, as sector and geographic diversity offset the impact of low commodity prices and lower emerging market growth.

Still, Aggreko maintained its full year dividend of 27.12p a share, which it said reflected its continued confidence in the strength and prospects for the group.

Chief executive officer Chris Weston said: “We have ended 2015 with a strong balance sheet, with net debt slightly down; as we continue to generate good levels of operating cashflow; and maintain discipline in our investment in new fleet.

“As we enter 2016 I am encouraged by the prospect pipeline we are seeing and pleased by the progress we are making with our business priorities."

Aggreko said it was on track to deliver £80m cash savings by 2017 from reorganisation and improvements in procurement.

At 0815 GMT, Aggreko shares were up 6.4% to 953p.