TIDMAGK
RNS Number : 0178X
Aggreko PLC
21 November 2017
THIRD QUARTER TRADING UPDATE
21 NOVEMBER 2017
Full year guidance unchanged
The trading update covers the period from 1 July 2017 to 20
November 2017. Unless otherwise stated, figures quoted in this
statement are for the quarter ended 30 September 2017.
Trading
Revenue excluding the impact of currency and pass-through fuel
for the third quarter was 1% up on last year with reported revenue
up 8%. Excluding the impact of Argentina, revenue was up 3% on an
underlying basis. All movements set out below exclude currency and
pass-through fuel.
Business Unit Highlights
Rental Solutions
Rental Solutions revenue was up 9% on last year including
revenue from the hurricanes that impacted the Southern United
States and the Caribbean.
In North America revenue was up 10% on prior year; 3% excluding
the impact of the hurricanes which generated incremental work but
also resulted in the cancellation of scheduled maintenance work.
The wider Rental Solutions business also contributed to the growth
with a strong performance in Europe, particularly in UK utility
sector, and a solid performance in Australia Pacific, with
increased activity in the mining sector.
Power Solutions
Power Solutions Industrial revenue was 6% higher with continued
strong performance in Eurasia where order intake remains robust at
255 MW (2016: 259 MW) year to date. The good performance in Africa
has also continued in the third quarter. Following a strong first
half there was a small decrease in the Middle East driven by lower
volumes in Qatar after the imposition of sanctions, and Saudi
Arabia where the lower oil price continues to impact the economy.
Although revenues in Latin America were down in the quarter,
operating profit increased as a result of the restructuring work
which was completed earlier in the year.
Power Solutions Utility revenue was 15% lower than last year
driven by repricing and off-hires in Argentina. Excluding the
impact of Argentina revenue decreased 7%. Year to date order intake
is 666 MW (2016: 1,034 MW) which includes 200 MW in Bangladesh, and
excludes the acquisition of KBT. The prospect pipeline continues to
be healthy, however it is still taking longer to convert than last
year. In Japan, half of our 148 MW contract has off-hired early,
paying an early termination fee, and we expect the rest to off-hire
in the first quarter of next year. In addition we continue to
expect that the remaining 214MW of volume in Argentina will
off-hire at the end of 2017. Regarding the current situation in
Zimbabwe, our site remains secure, manned by our local employees
and we remain in regular contact with the customer. In separate
discussions we have recently agreed with the customer to reduce the
volume on hire from 200 MW to 120 MW, and these sets are being
redeployed to our new contract in Bangladesh.
The off-hire rate for the nine months ending 30 September 2017
was 24% and we expect the full year off-hire rate to be in line
with our historic average of around 30%.
Working capital continues to be a key focus across the
organisation, in particular the Power Solutions Utility debtor
book. We continue to see delays in payments from some customers,
particularly in Africa where liquidity remains a challenge. No
customers dispute the debt, all have made payments and we are in
discussions with customers to reduce the remaining overdue debt.
Venezuela remains an exceptional situation, and while we continue
to support the country during a difficult period we are operating
at a considerably reduced number of megawatts and have reduced our
costs to a minimum.
Younicos
The integration of the Younicos acquisition is progressing well.
There is a healthy pipeline of opportunities for the combined
offering and we are working on a number of firm prospects.
Outlook
Our full year guidance remains unchanged. The trading
performance continues to support our view that, Argentina aside, we
will grow this year.
Forecast fleet capital expenditure is unchanged, at around
GBP300 million.
Enquiries
Investors & Analysts
+44 7876 478
272
Louise Bryant, Aggreko plc +44 7342 056
Tom Hull, Aggreko plc 727
Conference call
A conference call will be held today for investors and analysts
at 8.30am (GMT), hosted by Chris Weston, CEO and Carole Cran,
CFO.
Dial in: + 44 20 3059 8125
Conference call name: Aggreko
Editor's notes
Around the world, people, businesses and countries are striving
for a better future - a future that needs power and the right
conditions to succeed.
Aggreko works round the clock, making sure everyone gets the
electricity, heating and cooling they need, whenever they need it -
all powered by our class-leading equipment, trademark passion,
unrivalled international experience and local knowledge. From urban
development to unique commercial projects and even humanitarian
emergencies, we bring our expertise and equipment to any location,
from the world's busiest cities to some of the most remote places
on earth.
That's what has made us the world's leading provider of modular,
mobile power and heating and cooling. We've been in business since
1962. We have more than 7,300 employees, operating from more than
200 locations in 100 countries. With revenues of approximately GBP
1.6bn (USD 2.6bn or Euros 2bn) in 2016, we are listed on the London
Stock Exchange (AGK.L) and have our headquarters in Scotland.
Our business helps transform the lives and livelihoods of
individuals, organisations and communities across the globe, in
both developed and developing countries and markets.
We operate across all sectors, including oil and gas,
petrochemical and refining, utilities, manufacturing, construction,
mining and events.
We design and manufacture equipment specifically for these
requirements in our factory in Dumbarton, Scotland and work with
leading innovators to ensure our equipment offers maximum fuel
flexibility, by using gas, diesel (including HFO) and renewable
fuel sources.
For more information, please visit our website at:
aggreko.com
This information is provided by RNS
The company news service from the London Stock Exchange
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