Shares in Aggreko (LSE: AGK) lifted over 6% in early trade this morning, following a positive pre-close trading update.
The world’s largest temporary power generation company stated that full-year results were likely to be slightly ahead of previous expectations, with a 3% increase in 2013 underlying group revenues anticipated and trading profits “at similar levels” to 2012.
On a reported basis, group revenues for the year are expected to be around £1.57 billion, and profit before tax and amortisation is expected to be at least £335 million.
Some significant contract wins have helped boost Aggreko, after it was selected as the provider of temporary power for the 2014 FIFA World Cup and Glasgow 2014 Commonwealth Games.
Additionally, management announced it has signed a six-month 80 MW diesel contract in Panama, under which they will provide power as a licenced generator to the Panamanian wholesale electricity market, believed to be “the first time that a temporary power supplier has entered a country’s wholesale electricity market competing with permanent power generators”.
Elsewhere in the trading update, Aggreko revealed that net debt ought to be around £200 million lower than last year (likely to be below £400m at year end), due to strong cash generation driven by lower capital expenditure.
The group saw revenue growth of 6% in its local business, around 7% in the Americas and 8% in Europe, The Middle East and Africa, more than offsetting a decrease of 12% in Asia-Pacific, which is down “principally due to our TEPCO contracts finishing in Japan and some off hires in Indonesia”.
