August 1, 2018 / 8:29 AM / 18 days ago

Aggreko shares rise 11 percent as profit beats estimates

(Reuters) - Shares of Aggreko Plc (AGGK.L) jumped more than 11 percent on Wednesday, as the world’s largest temporary power provider reported a better-than-expected growth in first-half underlying earnings and stuck to its full-year forecast.

The company, which provides generators to cover electricity shortfalls or live events, also plans cost cuts of 50 million pounds to improve profitability in the medium term.

Aggreko’s pre-tax profit rose 8 percent, on an underlying basis, to 59 million pounds in the six months ended June 30.

“A strong interim EPS print, 18% ahead of consensus with unchanged guidance should be taken well given concerns on earnings momentum,” Jefferies said.

Liberum analysts said the profit exceeded a consensus estimate of 50 million pounds.

However, net first-half pre-tax profit was down 6.3 percent from last year, after taking into account exceptional items.

The company’s half-year revenue climbed 10 percent to 857 million pounds as the rental solutions unit, which provides power, heating and cooling to customers in developed markets, reported a 26 percent revenue jump.

Rental solutions, the biggest contributor to total revenue, marked strong activity across several key sectors such as building services and construction, petrochemical and refining and oil and gas.

“These are encouraging results that keep us well on track to deliver our full year guidance,” Aggreko Chief Executive Officer Chris Weston said on Wednesday.

Reporting by Muvija M in Bengaluru; Editing by Amrutha Gayathri

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