By Scott Wright

INVESTORS have shrugged off a fall in revenue at Aggreko in the first nine months of its financial year, sending shares in the temporary power generator up more than three per cent last night.

The Glasgow-based company said underlying revenue was down 2% on last year for the nine months ended September 30, amid a “mixed” performance by its dominant rental solutions division.

The division saw underlying revenue fall by 1%, despite revenue climbing by 4% in North America, its largest region, following growth in “most of our key sectors”.

READ MORE: Aggreko reveals it will employ 500 at Tokyo Games

Revenue increased in the US in spite of conditions softening in the market since the company reported its interim results in July. That softening coincided with the downturn in activity in the US shale sector, which is understood to have dented Aggreko’s activity in the petrochemical refining market.

The shale downturn recently caused Weir Group, the Glasgow-based engineering giant, to cut around 450 jobs across the Atlantic.

Elsewhere in Aggreko’s rental solutions arm, which accounts for 53% of overall revenue, the company said trends reported at the halfway stage continued, with growth in continental Europe offset by a ”weaker performance” in Northern Europe.

Growth in the mining sector across the Australia Pacific region was offset by a difficult comparison with last year, when the business had been positively impacted by a 100MW (megawatt) emergency utility contact.

READ MORE: Aggreko hails US resurgence as profits hit by currency headwinds

Meanwhile, the company said the performance of its power solutions industrial business had strengthened against the prior year in the last quarter, with underlying revenue now in line with 2018. Excluding the boost brought by its activity supporting the 2018 Winter Olympics, and early design revenue from its $200 million contract to provide power to the 2020 Tokyo Olympics, revenue was up 7% at the division over the nine months.

Aggreko, which expects to deploy more than 500 staff in Japan in support next year’s summer Olympics, said its power solutions industrial arm was performing well across Latin America, the Middle East and Africa. It added that its Eurasia business had “stabilised” following a downturn reported at the halfway stage.

Aggreko noted yesterday that the management of trade receivables “remains a major focus”, adding that it “continued to make good progress on cash collection through active engagement with our customers”. It is understood that this relates to legacy trade receivables owed by customers to it its Power Solutions Utility arm, which provides temporary power solutions to emerging markets across Latin America, Africa and Asia which currently lack utility infrastructure.

That division, Aggreko’s smallest, reported a 7% fall in underlying revenue over the nine months, with average power on hire down 9% at 2,445 MV.

The company said: “This reflects the timing of 2018 off-shires and new work in the period; the year-to-date off-hire rate was 23% (2018: 35%).”

Referring to the outlook, the company said its full-year earnings outlook is “in line with market expectations”. The consensus among analysts is for Aggreko to report profits before tax of £196m for the year. It will report its full-year results to the market on March 3.

Aggreko made a pre-tax profit of £182m on turnover of £1.76 billion last year.

Stockbroker Jeffries said in a note for investors: “3Q (third quarter) underlying growth was a little softer than we had expected due to a slowing in North America, mostly petrochem and manufacturing.

“Industrial revenues were boosted c£10m by some Tokyo Games design revenue which is a 1-2% tailwind in the context of an unchanged underlying outlook.

“In addition, FX (foreign exchange) is an incremental low single digit headwind since the interims.

“In utility the group continues to collect more than it bills which is important for improving returns.”

Shares in Aggreko closed up 25.2p at 822.2p.