Soldiers pulling out of Afghanistan, and Japan’s recovery from the devastating tsunami of 2011, hit the Glasgow-based firm, with trading profit dipping 2 per cent in the six months to 30 June to £146 million.
Despite the difficulties – which had been flagged up previously by Aggreko – chief executive Rupert Soames remained in a typically confident mood, describing the company as “cautious, not nervous” about the trading outlook.
“We know there is a lot of need out there, because we have got a lot of customers coming to our door and knocking, but they are more cautious right now about actually laying the credit card on the table,” Soames told The Scotsman.
Although emerging markets are slowing from the “headlong pace” of the past ten years, Soames said they would still continue to chalk up growth.
“We have seen this before – this is a break in growth, not broken growth,” he said.
Analysts tended to agree with his assessment, with most taking the view that the power projects division is in a temporary lull.
Caroline de La Soujeole, an analyst at Cantor Fitzgerald, said the group’s long-term growth prospects remained “solid”. “Meeting peak capacity demand in emerging markets will remain a problem for the foreseeable future,” she said, adding that Aggreko was well-positioned to benefit from the gap between supply and demand.
The star performer during the first half was the company’s “local” division, which rents out generators and cooling units.
The business accounted for 60 per cent of the group’s £760m of sales in the first half, up 9 per cent on the previous year. Profit margins strengthened from 13 per cent to 14 per cent.
By contrast, margins in the power projects division fell by three basis points to 31 per cent on revenues that remained roughly level with the same period a year earlier.
The company does not anticipate an increase in the pace of new power project orders “in the immediate future”, but higher uptake of its gas-fuelled generators should offset lower sales to the military and to Japan in the second half.
Aggreko now has about 1,000 megawatts of gas-fuelled capacity, which is cheaper and cleaner to run than diesel equipment.
Investment in kit is expected to fall to about £240m for the full year, nearly half of what the company spent in 2012.
Shares in Aggreko fell by 7.7 per cent, closing down 137p at 1,643p, the stock’s worst performance since it warned in December of slowing growth in emerging markets.
The interim dividend rose by 10 per cent to 9.11p.