Glasgow-based Aggreko recorded a dip in pre-tax profits for the first of the year, with problems associated with projects in Argentina having an impact.

The temporary power specialist saw profits fall to £63m from £71m in the first six months of the year. Revenues however climbed 16 per cent from £792m from £685m in the same period last year.
Chris Weston of Aggreko
The company warned of another dip in tax profits this year on the back of a price pressures in its Argentine business – there has been a repricing of its existing contracts in Argentina.

 It said price and volume reductions in the country hit revenues by £34m in the first half. With the exception of Argentina, Aggreko expects its other markets to all grow this year, said Chris Weston, chief executive. “We have made good progress enhancing our product offering, improving our customer experience and reducing our cost base, all of which makes us more competitive”, he said.

Ben Flint, market analyst at www.cityindex.co.uk told Decentralized Energy, “Aggreko’s results have broadly met market expectations, investors will be relieved there were no nasty shocks As expected, those factors that are affecting the bottom line are largely beyond management’s control and CEO Chris Weston’s attempts to improve the underlying business by trimming expenses and offering new products appear to be gaining traction, though it’s very early days.”

“Aggreko is currently trading at a relatively expensive 18 times earnings, so it will likely take a big uptick in the oil price — and more concrete signs of progress on Mr. Weston’s part — to return the share price to its 2012 glory days. It’s expected that the business’ other markets are to grow this year, with improvements in the North American market in particular.”