International power generation and temperature control rental specialist Aggreko plc posted £685 million in first half revenue, compared to £781 million a year ago, a 12.3-percent decline. The company said difficult economic conditions affected a number of its markets, particularly North America. The company reported strong Power Solutions Utility order intake of 875 megawatts.
Aggreko’s Rental Solutions revenue dropped 8 percent, driven by the decline in North America in upstream oil and gas that started to impact the company from the second quarter of 2015, as well as softness in the petrochemical and refining sector from the start of 2016, following a strong 2015. Outside of North America, Rental Solutions great year over year in both Europe and the Australia/Pacific market, where underlying revenue skidded 15 percent.
Overall Group trading margin was 11 percent, compared to 15 percent in 2015. The Rental Solutions margin fell 8 percent, while the Power Solutions Industrial margin dropped 3 percent.
In the Rental Solutions business, rental revenue decreased 10 percent and services revenue dropped 5 percent. Offsetting this, Aggreko had good growth in temperature control with revenue rising 15 percent including the 2015 acquisition of ICS, a specialist heating business, combined with good base business growth.
“The trading environment in this first six months has been difficult, with the lower oil price continuing to impact a number of our markets,” said Aggreko CEO Chris Weston. “We are holding our guidance for the full year while recognizing the importance of securing key contract extensions and the seasonal weighting of our North American business in the second half. I am pleased with the good progress we continue to make with our business priorities and the strong level of order intake in Power Solutions Utility to date.”
Scotland-based Aggreko has its U.S. headquarters in Houston. The company is No. 10 on the RER 100.
