August 5, 2014 / 8:46 AM / 4 years ago

UPDATE 1-Aggreko sees further impact on revenue, profit from FX

(Adds CEO comments, background, analyst note)

By Li-mei Hoang

LONDON, Aug 5 (Reuters) - Aggreko, the world’s biggest temporary power provider, said on Tuesday it expected sterling strength to hit results for the rest of the financial year after it posted a 9 percent fall in half-year pretax profits.

Interim Chief Executive Angus Cockburn said the company had been hit significantly by the strength of sterling relative to currencies such as the dollar, Brazilian real and Russian rouble, despite strong underlying growth.

“(In) the first half, the revenue impact was 80 million pounds and the trading profit impact was 23 million pounds. So we have had a significant impact from currency,” he told Reuters.

“In terms of the full year, based off the currency rates in June, we could see revenue hit by 150 million and profit by almost 50 million pounds,” he said.

The British firm, whose kit powers major events and covers electricity shortfalls such as the Commonwealth Games in Glasgow, said pretax profits fell 9 percent to 132 million pounds ($222.6 million)from 146 million a year earlier.

However, underlying revenue and trading profit rose 12 percent and 6 percent respectively, sending the company’s shares to the third highest spot of the FTSE 100 risers.

Shares in Aggreko, which operates in 100 countries, were 2.9 percent higher at 1771 pence by 0841 GMT. Liberum analysts, who have a “hold” rating on the stock, said the results were encouraging.

“First half pre-tax profit is 6 percent ahead of our forecast, with Q1 underlying growth having increased from 5 percent to 12 percent,” they said in a note.

“Overall the outlook is unchanged, although adverse FX provides an additional 2 percent headwind to forecasts. 2014 should prove a tough year for profit, but a high level of wins is still required to improve utilisation and we remain cautious over the impact of increased competition,” they said.

The company, which has a market capitalisation of 4.40 billion, said it continued to expect full-year underlying trading profit to be similar to last year’s 312 million.

It also said order intake for the first half of the year was 488 megawatts, ahead of the 397 megawatts secured in the same period last year.

Cockburn, who is due to step down as interim CEO after 14 and a half years, said he was considering his options, which some media reports suggested might include joining former CEO Rupert Soames at support services firm Serco.

This leaves the company without a CEO until Chris Weston, currently the head of Centrica’s British Gas division, joins next year after serving a 12-month notice period.

$1 = 0.5934 British Pounds Reporting by Li-mei Hoang; editing by Sophie Walker and David Clarke

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