Aggreko revenues up but uncertainty in Libya and Yemen persists

14th May 2015 07:17

Underlying revenues grew 4% in the first quarter at power solutions provider Aggreko, as a strong dollar helped balance a slowdown in North America and Asia Pacific.Reported revenue was up 8% but towards the end of the quarter the equipment hire provider started to see a decline in volumes and pricing in its North American shale oil business that was only partly offset by growth in other sectors, particularly petrochemical and refining.North America was up 6% overall, despite the late shale slump, the harsh winter in north-east USA and a slowdown in Chilean mining.The Europe, Middle East and Africa region grew 10% in the first quarter with initial revenues from the European Games in Baku helping growth of 6% in the local business, which rents generators and chiller equipment to companies near its outlets, and 14% in the power projects business, which builds and then operates utility-grade temporary power plants for utilities, the military and major mining and oil companies.Revenues were 13% lower in Asia, Pacific and Australia, with local business revenue slightly down, although the decline in Australia slowed and New Zealand and South Korea delivered strong growth.External conditions remain difficult in a number of markets, the company warned. In particular, the security challenges in Libya and Yemen persist.Moreover, while management expect growth to improve in the local business, they cautioned that it remained "unclear" what the full-year impact of a lower oil price would be across all its markets.Chief executive Chris Weston added: "Whilst it is early in the year and the market environment remains uncertain, we continue to expect underlying trading profit for the full year to be broadly in line with last year."We are making good progress identifying our business priorities and look forward to providing an update at the time of our interim results in August."Shares in Aggreko, which have remained well covered by short sellers with short interest of between 5% and 10% depending on sources, were down 0.5% to 1,616p by 08:45 on Thursday, bouncing back from greater losses earlier.