Aggreko profits hit by commodities rout
GENERATOR rental company Aggreko saw profits slump as the ongoing commodities rout saw its high exposure to the Australian mining sector hit demand.
Revenues at the company’s Asia, Pacific and Australia (Apac) division fell by 19 per cent as a slowdown in the mining sector meant fewer mines opened.
The decline in Apac revenues translated into a 46 per cent plunge in profits for the sector.
The poor results were further compounded by the strength of sterling, which reduced group revenue by £126m.
The company said it was mitigating some sterling exposure by primarily borrowing in local currencies.
The firm saw modest growth of six per cent in its North American division, driven in part by a 96 per cent increase in gas-fuelled generation as the US continued to enjoy its shale boom.
Aggreko said it was yet to see any significant impact from the falling price of oil on its operations.
However, it added it expects the decline in the price of oil to become a headwind for the company later in the year.
Overall revenue for 2014 remained broadly flat at £1.6bn, while group profits tumbled 13 per cent 289m for the same period.
New chief executive Chris Weston, who took over at the beginning of the year, said: “It’s a good business. We are currently looking at the priorities, so I’m working with my team and looking at technology, markets and customer requirements.
“We’ll come back to the market in the middle of the year to say what the priorities are but I suspect it will be broadly similar to what we’re doing now; nothing dramatic.”
Shares fell by 0.67 per cent yesterday, to close at 1,625p.