CURRENCY and fuel price fluctuations bolstered Aggreko’s financials in the first half of this year, adding £93 million to its turnover figure and £9m to its operating profit.
The Glasgow-headquartered business, which specialises in renting out power generators and cooling equipment, reported turnover for the six months to end of June of £792m.
While this was up 16 per cent from £685m a year earlier, chief executive Chris Weston said that when the currency and fuel-price movements were stripped out the figure was actually flat.
Similarly, while the reported £79m operating profit represented a drop of three per cent, on a like for like basis the fall was 11 per cent.
“Reported revenue and operating profit include the translational impact of currency as Aggreko’s revenue and profits are earned in a number of different currencies, most notably the US dollar, which are then translated and reported in sterling,” Mr Weston said.
“In addition, the group separately reports fuel revenue from contracts in our power solutions utility business in Brazil and Mozambique, where we manage fuel on a pass-through basis on behalf of our customers.
“Fuel revenue on these contracts is entirely dependent on fuel prices and volumes of fuel consumed and these can be volatile and may distort the view of the performance of the underlying business.”
Pre-tax profits at the firm fell by 10 per cent to £63m, with the figure reduced to £53m when one-off restructuring costs were factored in.
In a bid to save £25m in costs by the end of this year Aggreko closed seven facilities across Brazil, Chile and Peru, resulting in the loss of 200 jobs.
This is in addition to 700 jobs cut in the previous financial year, with the firm now targeting £105m in cost savings by the end of 2017, up from £80m.
In terms of business lines, the firm’s generator-rental arm saw turnover rise by 14 per cent to £319m and operating profit rise by 36 per cent to £14m.
The rises were two per cent and 14 per cent respectively when the currency effect is stripped out, with the profit figure reducing to £11m when restructuring costs are accounted for.
The firm’s domestic power generation business was hit by repricing in Argentina as well as delayed payments from customers in Africa, leading to an 11 per cent decline in like for like revenues. Bad debt provisions increased from $10m to $73m.
Mr Weston said that while “many customers are struggling with liquidity” the company is “working closely with them to agree payment plans to clear the overdue amounts”.
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