Aggreko Raises Guidance, Boosted By Work For World Cup

8th Jun 2010 07:33

By Jonathan Buck Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Aggreko PLC (AGK.LN), which rents generators to provide temporary power and cooling systems, Tuesday said its performance for the year will be significantly better than expected, boosted in part by work at the soccer World Cup finals that kick off Friday in South Africa. The FTSE 100 company, in a trading update for the first half through June 30, attributed the improvement in its prospects to the increased scale of its FIFA World Cup contract, the volume of new work secured in its international power projects business and favorable foreign-exchange movements. It expects first-half revenue, in constant currency and excluding pass-through fuel, its preferred measure, to rise about 10% year-on-year, and for trading profit to climb about 20%. Aggreko said it had seen an encouraging pickup in power and temperature control volumes at its local business. Rates remain weak, although the company said it is beginning to see some modest improvement. "We have recently secured a large amount of additional work for the FIFA World Cup, which will make it the largest contract ever executed by Aggreko for a sporting event," it added. Local business revenue in the first half will increase by about 16% in constant currency, helped by work for the Vancouver Winter Olympics and the FIFA World Cup. Margins will be a little better than last year, Aggreko said. In its international power projects business, demand has continued to be strong and Aggreko expects to secure orders for a record 900 megawatts of new work in the first half. "Importantly, much of the new work has come from Asia and Central and South America, which are areas which have been a strategic focus for our international power projects business," it said. As a result of its high order intake, Aggreko expects to hire out around 50% more equipment than in any previous six-month period. Aggreko said it has decided to raise its rate of fleet investment and it now anticipates that fleet capital expenditure will be about GBP265 million in the year, GBP45 million higher than previously expected. The company's shares closed Monday at 1,354 pence. They have climbed 47% in value since the start of 2010 amid optimism about its prospects and helped by its elevation in December to the benchmark FTSE 100 index. -By Jonathan Buck, Dow Jones Newswires; +44 (0)207 842 9237; [email protected] (END) Dow Jones Newswires June 08, 2010 02:33 ET (06:33 GMT)