Difficult markets to go on, says Aggreko

Aggreko said its markets were likely to remain difficult in 2016 as it adapts the business to cope with weaker oil and gas markets and geopolitical uncertainty.

Still reeling from a profit warning last month, the world’s largest temporary power provider said yesterday its “margins and returns are likely to be lower in the short term”.

“2016 will be assumed to be roughly flat on 2015,” chief financial officer Carole Cran said.

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The group, which provides generators for major public events and industry users as well as serving electrical utilities wanting to fill supply gaps, cut its 2015 pre-tax profit forecast by up to 15 per cent last month.

Yesterday it posted a 21 per cent fall in pre-tax profit for the first half of its financial year to £102m.

“The market environment that Aggreko faces has changed significantly in recent years and the company needs to adapt to the new landscape and maximise the opportunities available,” chief executive Chris Weston said.

Aggreko has been hit in its North American business by the falling oil price, which has resulted in declining activity and less equipment being hired by oil companies.

It also said security challenges in Yemen meant it could not operate all of its generators and equipment, while in Bangladesh the terms of a temporary power supply contract extension were not as favourable as it had hoped.