Aggreko profit up but sees growth slowing
LONDON (Reuters) - Temporary power provider Aggreko (AGGK.L) expects first-half profit to rise as its international power division continues to grow, but said growth would likely slow in the second-half, sending its shares lower.
Aggreko, which rents out generators, air conditioners and cooling towers, said it expected pretax profit for the six months to the end of June to grow by around 15 percent, with revenue up some 5 percent in constant currency terms, excluding fuel costs.
"Nearly all of our growth in the first half came from international power projects, which provides temporary power stations to utilities in Africa, Asia and South America, but the growth rate will slow in the second-half," Chief Executive Rupert Soames told Reuters in an interview on Tuesday.
"We had thought for some time that the local business would get tougher but it has been remarkably robust and we now expect it to get tougher over the course of the year."
Shares in Aggreko, which have lost a fifth of their value in the last year, were 5.9 percent down at a near three-month low of 494 pence by 10:20 a.m., valuing the group at around 1.35 billion pounds.
Aggreko, which powers events around the world including the Olympic Games and the Superbowl, reported a pretax profit of 67.9 million pounds on sales of 407.7 million in the first-half of 2008.
The company maintained its guidance for the year, despite tough comparatives in the second half.
Aggreko, which will provide the power for this weekend's Glastonbury music festival, expects 2009 profit to be at a similar level to that achieved in 2008 when it made a pretax profit of 191.6 million pounds.
"We signed a number of large contracts towards the back end of last year and we won't sign anything like that number in the second half so the growth rate should slow," said Soames.
Prior to Tuesday's trading statement Reuters Estimates had predicted Aggreko would report a pretax profit of 210 million pounds for 2009, according to a poll of 12 analysts.
"Previous guidance was for 195 million pounds of capex for 2009; this has been revised to 170 million pounds and is indicative of a much more challenging outlook," says Collins Stewart analyst Julian Carter, who maintains a "sell" rating.
Aggreko expects its international power projects unit to grow first-half revenue by around 40 percent, helped by growth from emerging markets where clients, especially those struggling to obtain funds to build power plants, have snapped up rental units to meet their growing energy needs.
(Editing by David Holmes and Rupert Winchester)
