Temporary power provider Aggreko Plc (AGK.L) on Friday issued an upbeat update for the first half of the year, stating it expects to deliver a strong performance for the period. The company still sees another year of good growth in 2012, benefiting from the London Olympics and the Poit Energia
acquisition in Brazil.
In a trading update on the half year ending June 30, the firm said it sees underlying group revenue growth of around 15 percent and trading profit of around 20 percent.
On a reported basis, group revenue and trading profit are expected to increase by around 14 percent and 25 percent, respectively.
In the International Power Projects business, revenue excluding pass-through fuel and currency movements is expected to grow by around 17 percent in the first half. Order intake continues to be strong and is likely to be over 700 MW.
Trading margin in International Power Projects, excluding pass-through fuel, is expected to increase from last year, notwithstanding a similar increase in bad debt provision.
In the Local business, the company sees underlying revenue increase of about 13 percent. Within this, the Europe and Middle East business is expected to grow by around 9 percent, North America by around 11 percent and Aggreko International's Local business by about 25 percent.
Local business trading margin in the first half is estimated to be slightly better than last year on an underlying basis.
The firm will announce interim results on August 2.
Aggreko said its underlying rate of growth in the Local business in the second half is likely to be hurt by weakening macro-economic environment, but any weakness will be offset by the impact of the London Olympics and the Poit acquisition that was announced in March. On a reported basis, the firm sees strong growth in the second half.
In International Power Projects, the company expects to deliver faster revenue growth in the second half than in the first.
Citing the strong order intake and a healthy pipeline of enquiries, Aggreko decided to raise fleet investment in 2012 by an additional 50 million pounds to around 415 million pounds. The additional fleet will not become operational until late in the fourth quarter.
Margins in International Power Projects are expected to be lower in the second half compared to last year, owing mainly to higher mobilization costs.
The company continues to believe that it will deliver another year of good growth in 2012. Overall, Group margins will be at similar levels to 2011.
AGK.L is currently trading at 2,096 pence, down 64 pence or 2.96 percent, on a volume of 85,454 shares.
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by RTT Staff Writer
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