Temporary power provider Aggreko today said its annual profits remained on course to come in lower than last year, despite unveiling a rise in first-quarter revenues.
The Glasgow-based group, which warned on earnings last month after flagging a “significant impact” from contracts in Argentina, said reported revenues for the three months to the end of March were up 18 per cent.
• READ MORE: Aggreko slumps as contract woes spark profit alert
At its rental solutions arm, which operates in developed markets serving industries such as oil and gas, petrochemicals, mining and major events including the Commonwealth Games, sales rose 3 per cent on last year.
Although Aggreko said oil and gas revenues in North America had “stabilised” and were higher than the final three months of last year, they remained a third lower than the first quarter of 2016.
In power solutions, which focuses on emerging economies, industrial revenues jumped 17 per cent on the back of “strong performances” in Eurasia and the Middle East, but the firm said conditions in Asia and Latin America continued to prove more challenging. At the unit’s utility operations, sales were down 7 per cent, but up 4 per cent once the impact of repricing legacy Argentina was stripped out.
Issuing its profit alert last month, the FTSE 250 group said that the deals in Argentina, where it has been operating since 2008, were signed at a time when “industry dynamics were different” and the risks of operating in the country were higher amid strict foreign exchange controls and bond defaults.
Overall, Aggreko said its outlook for 2017 was unchanged, with pre-tax profits before one-off items set to fall behind the figure of £221 million it reported for 2016, but excluding Argentina from the equation it expects to deliver growth and is targeting investment of about £300m in its fleet.
Chief executive Chris Weston said: “I am pleased to see underlying growth in both business units, in particular in power solutions industrial. We continue to execute on our business priorities: investing in technology; improving our customer focus; and delivering efficiencies.”
Aggreko was buoyed recently by a deal to help keep the lights on at next year’s Winter Olympics in the South Korean city of PyeongChang. It has also been chosen to provide power for the 2018 Commonwealth Games on Australia’s Gold Coast.