Aggreko shares in double-digit slide as demand for generators tails off

Aggreko news
Aggreko Power temperature control at the French Open

Aggreko shares fell by more than 13% this morning after the temporary power supplier reported a £30million drop in its first half profits amid a “difficult trading environment”.

Aggreko, which has a manufacturing facility in Dumbarton, also stuck to its earlier guidance that profits for the full year would be slightly lower than in 2015.

The company, which has provided rental power for major sporting such as the Commonwealth Games in Glasgow and the FIFA World Cup in Brazil, also said it had made 700 employees redundant worldwide as part of plans to achieve savings of £80million.

Aggreko previously said the impact of the cuts on its Scottish workforce would be minimal, but declined to give an exact figure.

It is thought to have about 450 staff members in Scotland.

Revenues at the Glasgow-based firm’s rental solutions business took an 8% hit due to a downturn in demand from oil and gas clients in North America during the six months.

Group pre-tax profits came in at £71million before one-off items in the first half, down from £102million a year ago, on revenues 12% lower at £685million.

Aggreko Chris Weston said yesterday: “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 and the seasonal weighting of our North American business to the second half.

“I am pleased with the good progress we continue to make with our business priorities and the strong level of order intake in Power Solutions Utility to date.”