Increased First-Half Revenue Will Lead to More Investment, Aggreko Says

Aggreko expects to secure orders for a record 900 MW of new work in the first half of 2010, with much of the new work coming from Asia, Central and South America, areas of strategic focus for the company’s International Power Projects Business, the company said in a trading update this week. Aggreko said it also secured a large amount of additional work for the FIFA World Cup, the largest contract ever executed by Aggreko for a sporting event.

Aggreko said it expects that in the first half, through June 30, group revenue in constant currency will grow by about 10 percent, with trading profit increasing by about 20 percent.

“New contracts won in the first half include 200MW in Bangladesh, 215MW in Indonesia and 180MW in Central and South America,” the company said.

Aggreko expects International Power Projects revenue to grow by about 8 percent in the first half, with margins remaining strong. The growth rate in the number of megawatts on rent has accelerated in the second quarter,” Aggreko said, “and we expect to start the third quarter with around 18-percent more MW on rent than the prior year.”

In its Local Businesses segment, Aggreko’s average volumes in the first half will be about 9 percent higher than 2009’s first half, the company said. “Currently both temperature control and power volumes are showing double-digit growth over the prior year,” the company said. “Rates remain weak, although we are beginning to see some modest improvement.”

Local Businesses revenues in the first half will increase by about 16 percent in constant currency, helped by revenues from the Vancouver Winter Olympics and the World Cup. As a result of the World Cup contract and new work secured in International Power Projects, the company is raising its rate of fleet investment and now expects that fleet capital expenditure will be around £265 million (about U.S. $390 million) in the year, an increase of £45 million over previous expectations.

About half of the new investment will go to allow the accelerated introduction of a new generation of low-emissions generators into the North American market, the company said.

Based in Scotland, with U.S. headquarters in Houston, Aggreko is No. 9 on the RER 100.

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