SHARES in Glasgow-based power generation specialist Aggreko rose by as much as 2.4 per cent in morning trading yesterday after the business confirmed that it is on track to match its 2017 profit figure in the current financial year.
In the 12 months to December 2017 the company, which supplies temporary power generation equipment to sectors including the oil and gas industry, made a pre-tax profit of £195 million, which was reduced to £154m after one-off items were taken into account.
In its third-quarter trading update the company said that revenues for the nine months to the end of September were up seven per cent on the same period last year, adding that it remains “on track to deliver our guidance of full-year profit before tax in line with 2017, excluding the effects of currency”.
Performance is being driven by Aggreko’s rental solutions arm, which provides heating, cooling and power equipment to clients in developed markets and accounts for 52% of the business. It saw underlying revenues rise by 26% in the first three quarters of the year.
That part of the business has benefited from the recovery in the oil and gas sector in North America as well as increased activity in the Australian mining sector.
The power solutions arm, which serves emerging markets, reported mixed fortunes, with the section that focuses on industrial customers seeing underlying revenues increase by 11% while the portion that focuses on utilities customers contracted by 14%.
In its update to the market, the firm said the drop in utilities revenues was expected and reflected “lower rates and volume in Argentina and the continuing effect of the off-hires in Zimbabwe, Bangladesh and Japan”.
It added that the industrials business was “supported by the South Korea Winter Olympics, excluding which underlying revenue was up 2%”.
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