Aggreko profits drop as it chief exec unveils new strategy

Market news
Market news

Aggreko has seen its pre-tax profits drop from £130million to £102million, affected by a number of factors including the slowdown in the North American oil and gas sector and civil war in Yemen.

The power provider has created two separate business units which came into effect this month as it looks to adapt to market conditions.

It said the move will include the “streamlining” of back-office processes and closing some depots.

The company said its power projects revenue was also down by 9% which was driven by Bangladesh pricing and lower utilisation on a Panama contract.

Chris Weston, chief executive, said: “The performance of the Group in the first half was impacted by difficult trading conditions in a number of our markets, notably Bangladesh, and external factors, including the impact of a lower oil price and ongoing security concerns in Yemen.

“Our new organisational structure, which incorporates Rental Solutions, comprising our Local business in developed markets, and Power Solutions, comprising our Power Projects business and Local business in developing markets, better focuses the business on our markets and our customers, providing a more effective platform for growth.

“Aggreko is the market leader in the provision of fast, mobile, modular power, fulfilling a critical need. It is clear that although the market environment has changed, that our business model is sound and that we have good growth opportunities in each of our markets.

“Through focusing on three business priorities: our customers; our technology; and our efficiency, we are positioning the business for its next phase of growth. I am impressed by the commitment of our people and our culture and I am confident that our new focus and structure will see the business return to growth.”

Shareholders are expected to receive an interim dividend of 9.38p a share in October, unchanged from last year.