Temporary power firm Aggreko reports 31% profits drop

Image source, Aggreko

Temporary power suppler Aggreko has reported a 31% drop in profits to 拢61m as part of its half-year figures.

The Glasgow-based firm, which assembles generators at a plant in Dumbarton, also said revenue for the first six months was down 12% to 拢661m.

Reasons for the slump include the weaker state of the North American energy industry and refining markets. Revenue in that sector was down 20%.

The firm has also had costs associated with a troubled contract in Bangladesh.

It has also set aside an extra $17m (拢13m) for bad debt in supplying power to Venezuela.

Aggreko said, however, that it had been winning larger orders for generating capacity to make up for power shortfalls in other developing nations, including Brazil and Zimbabwe.

Its half-year figures also show that supply of temporary power to industry has been stronger in Europe and Australia-Pacific.

There has also been growth in orders from Russia, Africa and the Middle East, despite the low oil price.

Aggreko chief executive Chris Weston said: "The trading environment in this first six months has been difficult, with the lower oil price continuing to impact a number of our markets.

"We are holding our guidance for the full year while recognising the importance of securing key contract extensions".

Aggreko has repeatedly been the major supplier of temporary power to the major sporting events but pulled out of bidding for contracts linked to the Rio de Janeiro Olympic Games due to delays and uncertainty.