Aggreko PLC Interim Management Statement (8104E)

TIDMAGK

RNS Number : 8104E

Aggreko PLC

15 April 2014

15 April 2014

INTERIM MANAGEMENT STATEMENT

   --      Encouraging start to the year 
   --      Local business continues to deliver strong growth 
   --      Power Projects order intake of 406 MW in the year to date, up 150 MW year-on-year 
   --      Strong cash generation in the quarter; net debt down GBP277 million year-on year 
   --      GBP200 million return of capital scheduled for June 2014 

Trading

We have made an encouraging start to the year. Underlying Group revenues in the three months to 31 March 2014 grew 5%; "underlying" excludes pass-through fuel and the impact of currency movements. As anticipated, reported revenues were significantly impacted by adverse currency movements, and decreased by 4%. All growth rates set out below are on an underlying basis.

Two of our three regions delivered strong revenue growth in the first quarter, with Americas up 11% and Europe, Middle East and Africa (EMEA) up 15%. Trading remains difficult in Asia Pacific (APAC), and revenues were down 21%.

The Local business has continued to trade strongly, with underlying revenues in the first quarter up 11%. Amongst the regional Local businesses Americas grew by 12% and EMEA grew by 19%. APAC's revenues were 10% lower in the face of more challenging market conditions in Australia, driven by the slowdown in the mining sector. Overall, Local business margins on both a reported and underlying basis were at similar levels to the prior year for the first quarter.

Power Projects revenues in the first quarter were 3% down on an underlying basis largely driven by off-hires over the last twelve months in Indonesia, Military and Japan, which were partially offset by on-hires in the same period in Mozambique and Ivory Coast. Power Projects margins in the first quarter benefited from a reduction in bad debt provisions as a result of improved cash collections; excluding this benefit, and as anticipated, margins were lower than the prior year. Quarter one order intake amounted to 209 MW, similar to the fourth quarter of 2013. However, the first weeks of quarter two have seen order intake of nearly 200 MW, and year-to-date order intake now stands at 406 MW, which compares with 260 MW at the same stage last year. Within this we are pleased to have signed a 12-month 50 MW HFO contract in Senegal as well as 170 MW of short-term summer peak-shaving contracts in Saudi Arabia and Oman. We have also begun to deploy the 120 MW Libyan contract, announced at the time of our results in March, and accordingly it is now included in the order intake.

Financial position

Net debt at GBP320 million decreased by GBP43 million in the three months to 31 March 2014. This compares to net debt of GBP597 million at 31 March 2013; the GBP277 million year-on-year decrease reflects the ongoing strong cash generation by the Group largely as a result of a disciplined approach to capital expenditure.

As announced at the time of our full year results, we are proposing a GBP200 million return of capital to shareholders which, subject to shareholder approval, is expected to be paid in June 2014.

Outlook

The Group has made an encouraging start to the year. Overall, the Local business has had a good start to the year. Order intake year to date in Power Projects has been strong, but a significant proportion of this is for relatively short-term work, so we continue to be cautious.

We expect fleet capital expenditure in 2014 to be at similar levels to last year, with around GBP130 million in the first half and around GBP215 million for the year as a whole; as always, we will adjust our rate of investment depending on market conditions.

Overall, our expectations for the year remain unchanged.

Conference Call

A conference call will be held today for investors and analysts at 8.00am (BST).

   Dial in:                                                              [phone] 
   Participant code:                                                28931118# 

A recording of the call will be available on demand for 30 days.

   Audio playback:                                                 [phone] 
   Reference:                                                         647476# 

Future Reporting

Following a review of the financial reporting calendar, we have concluded that the historic practice of reporting six times a year is no longer appropriate. Therefore, in line with many FTSE 100 companies, we will cease the pre-close trading updates which we have historically given in June and December of each year. The next time that the Group reports will be on 5 August 2014, when we will announce our results for the first half of the year; a full financial year calendar is available on our website at www.aggreko.com/investors/financial-calendar.aspx.

 
 Enquiries 
 
  Investors & Analysts 
 Louise Bryant, Aggreko plc       [phone] 
 
   Media 
 Neil Bennett / Tom Eckersley, 
  Maitland                        [phone] 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IMSEAXLLFFNLEFF