Aggreko powers up in first quarter

TEMPORARY power provider Aggreko has generated a steady rise in first-quarter revenues thanks to record orders at its international arm, though the shares eased on profit-taking.

The Glasgow-based group, whose international projects business supplies power to emerging markets such as Kenya and Uganda, said 18 new projects were contracted in the first quarter, representing more than 440 megawatts of additional capacity.

International revenues were up 8 per cent in the quarter to 31 March, while margins remained very strong, Aggreko said yesterday.

"Local" business, revenues in constant currency also grew by 8 per cent, helped by revenues from the Vancouver Winter Olympics and the build-up to the World Cup. On an underlying basis, however, revenues at the division were 9 per cent lower. Group revenues grew by 5 per cent in the first quarter.

Charles Stanley, which has a "hold" rating on Aggreko's shares, noted that the additional capacity at the international business was unlikely to be earning revenue until "well into the second half".

Analyst Tony Shepard said: "We have some reservations that profit margins in IPP (International Power Projects] look exceptionally high but the order input and outlook remains buoyant. On balance we feel the share rating is fair."

The City is expecting 2010 profits of about 250m. The shares closed down 27p at 1,162p.