Aggreko sticks to full year guidance despite tough backdrop

Aggreko maintained its full year profit expectations despite a challenging market backdrop, as it reported a fall in third quarter sales.

In a trading update for 1 July to 8 November, the temporary power provider said underlying revenue for the period was 7% behind last year, with reported revenue down 6%. This was partly a result of the continuing weak economic backdrop in Brazil.

Revenue in Rental Solutions was down 1% on last year and Aggreko said ongoing weakness in the oil and gas and mining sectors was largely offset by continued growth in other sectors, such as petrochemical and refining.

Power Solutions revenue was 11% lower than the same period last year. Within this, Industrial was 12% higher, including the successfully executed European Games.

The company said it saw solid growth in its Russian and African businesses, but Brazil remained a drag.

Utility revenue in Power Solutions fell 21% from last year, driven by the previously-announced price reduction on Aggreko’s contract extension in Bangladesh and the off-hiring of its contract in Panama. Excluding the impact of these, revenue was down 12%.

Still, the company maintained its guidance for 2015 full year pre-tax profit of between £250m and £270m.

Chief executive Chris Weston said: “Whilst we are at an early stage in delivering the specific actions identified at our business review in August, I am encouraged with the progress we are making which, regardless of the prevailing market conditions, will strengthen Aggreko and position it well for the future."