Aggreko shares power down after falling profits fail to impress

Oliver Gill
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Aggreko is headquartered in Glasgow (Source: Getty)

Aggreko, the world's biggest temporary power provider, today disappointed investors as full-year profits slumped.

Shares in the FTSE 250 firm plunged as much as nine per cent markets opened, hitting lows last seen over eight years ago.

Headquartered in Glasgow, Aggreko provides mobile power plants to cover temporary outages or satisfy increased demand during major events.

Operations in Argentina have come under pressure from lower pricing and volumes.

Profit before tax fell 12 per cent to £195m, this was despite group revenue soaring 14 per cent to £1.7bn on the back of large currency gains. Dividends were maintained at 27.12p per share.

Read more: Aggreko shares plunge amid emerging market concerns

Jefferies equity analyst Will Kirkness said while last year was better than 2016, he expected earnings to fall around 10 per cent going forward. Full-year figures were four per cent below consensus expectations, he said.

"I am pleased that we are seeing revenue growth return, with strong performances in both rental solutions and power solutions industrial. As expected, the challenges in power solutions utility held back the group overall," said Aggreko chief executive Chris Weston.

"Over the last three years we have stabilised the business, enhanced our service offering and positioned ourselves to prosper in rapidly changing energy markets. We have delivered over £100m in cost savings, invested in new systems and processes and developed new technology, all of which enables us to provide high-quality solutions for customers. We expect 2018 group profit before tax to be in line with last year, on a constant currency basis."

Read more: Aggreko stumbles: Share price slumps as analysts downgrade expectations

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