Aggreko plc Trading
Statement
18 December 2009
Aggreko plc, the world leader in the provision
of temporary power and temperature
control solutions, is today issuing the
following trading update for the year ending 31 December 2009.
Trading in the fourth quarter has been better than we
anticipated, driven by a strong performance in
International Power Projects.
We now expect that Group revenue for the year will be slightly
over £1 billion, and operating profit will be around £260 million.
On a headline basis revenues are expected to be up 7% and operating
profit up 27%; we anticipate that earnings per share will increase
by at least 33%.
2009 will be a 53-week financial year, and will therefore
benefit from an additional week’s trading. In constant currency,
excluding pass-through fuel, and adjusted for the impact of the
53rd week, revenues for the year are expected to be down 5% and
operating profit up 4%.
We expect to generate net cash inflow of around £160 million in
the year, and we anticipate that net debt at 31 December 2009 will
be around £180 million, against £364 million at 31 December
2008.
In the fourth quarter, the International Power Projects business
has continued to trade strongly. We expect revenue in the fourth
quarter in constant currency, excluding fuel and adjusted for the
53rd week, to be up 8%. Trading margins have remained strong. There
was a sharp increase in the number of new megawatts (MW) put on
hire, and we will probably just beat our previous record of
delivering 300 MW of new capacity in a single quarter, although
this will be partly offset by a higher off-hire rate as about 100
MW of summer peaking capacity in Saudi Arabia comes to the end of
its contract.
Our Local businesses have continued to trade in line with the
pattern seen in the third quarter. We expect revenue in the fourth
quarter, in constant currency and adjusted for the 53rd week, to be
down about 21%. Rates have continued to be weak, and all areas
other than the Middle East,
Russia and China
have seen lower revenues. The sharpest declines in both rate and
volume have been in
temperature control; volumes in
power rental have remained robust and are only
slightly down on the prior year. As a result of effective
management of costs, trading margins in the Local business have
been resilient, and in aggregate are expected to be only a few
percentage points below the level achieved in the same period last
year.
Outlook
Looking ahead to next year, and allowing for the impact of the
53rd week in 2009, we expect that the Group will make further
progress on a constant currency basis. Activity levels in
International Power Projects are encouraging, and we expect to
start the year with about 10% more MW on rent than we had a year
ago. In the Local business, it is difficult to predict the timing
or extent of any underlying improvement, although we expect that
2010 will be a strong year for major events, starting with the
Winter Olympics in Vancouver, for which we are the
official supplier of
power and temperature control. Outside of major
events, all we can say at this stage is that conditions are getting
no worse and we are hopeful that we will start to see some
improvement in the coming year.
In terms of capital expenditure, we expect to continue to expand
our fleet. We currently plan to spend around £180 million on new
fleet in 2010, £30m more than in 2009, and about 1.2 times fleet
depreciation. However, our ability to adjust capital spending
rapidly is an important feature of our business model, and we will
manage the rate of fleet investment through the course of the year
in the light of demand.
Preliminary Results will be announced on 4 March 2010.