AGK Aggreko Plc

TIDMAGK

RNS Number : 5697W

Aggreko PLC

28 April 2016

28 April 2016

FIRST QUARTER TRADING UPDATE

GUIDANCE FOR THE YEAR UNCHANGED

The trading update covers the period from 1 January 2016 to 27 April 2016. Unless otherwise stated, figures quoted in this statement are for the quarter ended 31 March 2016.

Chris Weston, Chief Executive, commented: "Performance in this first quarter has been in line with our expectations. Whilst some of the markets we operate in continue to be challenging I am encouraged by the order intake to date. Our guidance for the full year, of profit before tax slightly lower than 2015*, remains unchanged."

Trading

Underlying** revenue for the first quarter was 14% behind last year with reported revenue down 17%. All movements set out below are on an underlying basis.

Business Unit Trading

Rental Solutions revenue was down 9% on last year. Revenues in North America were lower year on year, which was the combination of the previously noted softness we have seen coming into the year and against a particularly strong comparator in upstream oil and gas revenues in the same period last year. Outside North America, the Rental Solutions business grew and, in response to a hydro shortage in Tasmania, we are in the process of mobilising 108MW, which will begin to have a positive impact on our performance from the second quarter.

Power Solutions Industrial revenue was 10% lower, primarily due to the prior year comparatives including revenues from the European Games. Elsewhere, we continued to see growth in Russia, Middle East and Africa offset by more difficult trading conditions in Latin America, in particular Brazil and Chile.

Power Solutions Utility revenue was 19% lower than last year. The first quarter of 2015 included revenues from our diesel contract in Panama which ended in June 2015, in addition the previously announced new contract terms in Bangladesh were not effective until the second quarter of last year, which has also affected this year's first quarter results. Finally, as noted at the time of the full year results announcement we have demobilised 108MW from our 263MW of gas-fuelled plants in Mozambique, where permanent power has come on line. Year to date order intake is 486MW (14(th) May 2015: 388MW), including our recently announced 3 year diesel contract in Zimbabwe. The quarter one off hire rate was 11% (2015: 6%). We continue to expect the full year off-hire rate to be around 30%. The geopolitical situation also remains challenging in Yemen and Venezuela.

Capital Expenditure

Fleet capital expenditure is expected to be around GBP250 million (2015: GBP237 million), in line with the guidance issued at the full year. This spend will focus on investment in more efficient gas and diesel engines.

Outlook

As indicated at our full year results in March, the timing of contract start and end dates will have an impact on first half year on year profitability. Overall the guidance of slightly lower year on year profit before tax and exceptional items on a constant currency basis remains unchanged.

Conference Call

A conference call will be held today for investors and analysts at 8.30am (BST), hosted by Chris Weston, CEO and Carole Cran, CFO.

Dial in: + 44 20 3059 8125

Conference call name: Aggreko Q1 Trading Update

A recording of the call will be available on demand for 7 days.

   Audio playback:                                                               + 44 121 260 4861 
   Reference:                                                                       3126329# 

Future Reporting

   Technology teach in, Dumbarton                                        8 June 2016 
   Half year results, London                                                  3 August 2016 
   Rental Solutions site visit                                                  w/c 10 October 2016 
   3Q16 trading update                                                         16 November 2016 

Enquiries

 
 Investors & Analysts 
                                +44 7342 056 
 Tom Hull, Aggreko plc           727 
 
   Media 
 John Sunnucks / Liz Morley,    +44 20 3772 
  Bell Pottinger                 2500 
 

*Pre-exceptional items and on a constant currency basis

** 'Underlying' is defined as: adjusted for currency movements and pass-through fuel revenue from Power Solutions, where we provide fuel to our contracts in Mozambique on a pass-through basis.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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