Aggreko warns on profits over Argentina contracts
This article contains affiliate links. We may earn a small commission on items purchased through this article, but that does not affect our editorial judgement.
The group said 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.
Chief executive Chris Weston added: “We expect to see growth across the group in 2017, augmented by incremental annualised cost savings of £25 million from the second half.
Advertisement
Hide AdAdvertisement
Hide Ad“However, this will be more than offset by the significant impact of Argentina and as a result we expect full-year profit before tax and pre-exceptional items to be lower than last year.”
His comments came as Aggreko – which has cut 700 jobs under a cost-saving plan – reported a 12 per cent drop in pre-tax profits, excluding one-off items, to £221 million for 2016 – a year that Weston described as “challenging”.
Revenues for the 12 months to the end of December came in 3 per cent lower at £1.5 billion, but Weston said he was “pleased with the progress that we are making across the group implementing our transformation programme to return the business to growth”.
He added: “These improvements, taken with our market leadership, technical capability and the need for our products being as relevant as ever mean I am confident we are well on track to create a stronger business for the future.”