International power generation specialist Aggreko posted £768 million in first half revenue compared to £857 million in the first half a year ago, a 10.4-percent decline. Underlying revenue, which excludes pass-through fuel and currency declined 4 percent. Aggreko’s Rental Solutions unit recorded £400 million in first half revenue, compared to £386 million a year ago, a 3.6-percent increase.
The Power Solutions Industrial division posted £198 million compared to £219 million last year, a 9.6-percent drop, primarily because 2018 had the benefit of revenue from the Winter Olympics. Excluding the Olympics revenue, group revenue was in line with last year, reflecting a small increase in Rental Solutions and solid growth in Power Solutions Industrial, offset by a decline in Power Solutions Utility.
“We have had a good start to the year and are on track to deliver full-year earnings in line with market expectations,” said CEO Chris Weston. “Focus on delivery in our key sectors, combined with operational and cost efficiencies and the benefit from our investments in systems, has delivered improved profitability. We continue to innovate to meet our customers’ evolving needs through the energy transition, and during the period we launched the Y.Cube, our new modular and mobile energy storage system. Progress on receivables has also been encouraging, particularly in Africa, and this all underpins our confidence in achieving our mid-teens ROCE target in 2020.”
The company has mobilized its first Y.Cubes as its hybrid pipeline continues to build. Aggreko is on track to deliver full-year earnings in line with market expectations and mid-teens return on capital employed in 2020.
Rental Solutions underlying revenue rose 1 percent, mainly driven by North America where revenue was up 7 percent with strong growth in oil and gas. The operating margin rose 1.1 percent points to 11.8 percent, reflecting both higher rates and the benefit of Aggreko’s work in support of power shortages in Belgium.
Power Solutions Industrial’s underlying revenue declined 9 percent, however excluding the benefit of the South Korea Winter Olympics in 2018m revenue increased 4 percent, with good growth in Latin America, Africa, and the Middle East, partially offset by a slowdown in Eurasia and Asia. The company’s operating margin was 10.5 percent, up 0.6 percent. Power Solutions Utility’s underlying revenue slipped 7 percent primarily because of off-hires in Mozambique and Japan.
North America underlying revenue rose 7 percent year over year, 16 percent excluding hurricane revenue in 2018. Continental European business grew underlying revenue 12 percent, helped by revenue earned from work in response to power shorteges in Belgium and the FIFA Women’s World Cup in France.