Aggreko shares plunge amid emerging market concerns

Oliver Gill
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Aggreko warned in March that full-year profits would be hit

Shares in Aggreko, the world's largest temporary power producer, plunged 11 per cent this morning amid concerns full-year results will be dented by emerging markets discounts.

In the firm's third-quarter trading update, power solutions utility revenue slumped 15 per cent as a result of Argentinian "re-pricing".

In March, Aggreko said full-year results would be hit by discounts applied in Argentina.

Aggreko today warned it was struggling to get a number of customers to pay, "particularly in Africa where liquidity remains a challenge". It said Venezuela operations remain "an exceptional situation" and planned to keep costs in the country "to a minimum".

Read more: Share price outage hits Aggreko in profits warning

Industrial power solutions revenue was six per cent up and rental solutions sales up nine per cent. This meant total group revenue was up one per cent in the third-quarter. The FTSE 250 firm reiterated its guidance.

"Oil price volatility, emerging market uncertainty, new technology and unpredictable competitor behaviour continue to put returns under pressure," said Peel Hunt analyst Andrew Nussey.

However, Nussey did highlight the firm's focus on innovation and operational efficiency "suggests that profitability and returns could recover".

Read more: Aggreko promises to shine a light on Olympic dreams

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