Scots power firm Aggreko saw its share price rise after demand for major power projects from governments and miners hit a record high.
Shares in the Glasgow-based company surged 6% as it emerged its power projects arm – which builds and runs temporary power plants – has quoted on a record level of contracts over the past six months, although these are yet to translate into firm deals.
Aggreko said revenues fell 6% between July to September, after the absence of last year’s London Olympics boost – when it powered 39 Games venues – but remained up slightly on an underlying basis.
The company’s power projects arm runs contracts such as supplying energy to German army camps in Kosovo. Underlying sales in the division dipped 2%, with order intake roughly level with a year ago, despite a 50MW contract to keep the lights on in Guinea’s capital Conakry, which had been hit by power cuts.
Revenues in its local business, which rents equipment ranging from small generators to large industrial cooling towers, grew 4% on an underlying basis, lifted by near 10% growth in the Americas.
Across the group, sales in its Australia and Asia Pacific region slumped 17%, as contracts end in Japan and Indonesia.
But sales grew 6% in the Americas and 8% in its Europe, Middle East and Africa region, lifted by 430 MW of gas contracts in
Mozambique and Cote d’Ivoire.
Aggreko has suffered over the past year as the absence of the Olympics, the withdrawal of US troops from Afghanistan and the tough global economy weigh on its business.
Aggreko said it is on course to meet earnings expectations for 2013, although analysts at Investec Securities plan to drop their pre-tax profits forecast by about £10 million to £330 million due to the strength of sterling.
That would compare with profits of £365 million a year earlier.
Investec analysts said: “Whilst there are likely to be further currency-related forecast downgrades, the underlying message is largely unchanged.
“The local business continues to perform well against some tough comparisons and power projects needs new customers to sign on the dotted line.”
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