Saudi power deal bolsters Aggreko interim results

Dubai Festival City is one of many projects supplied by Aggreko in its 18-year history in the GCC

A contract with the Saudi Electric Company to supply 100 MW of short-term power to combat seasonal shortages in Saudi Arabia has helped bolster Aggreko’s international revenue.

The supplier of temporary power and temperature control has just announced its interim results for the six months to 30 June 2009. International Power Projects (IPP) boosted its revenue by 40% and trading profit by 72%.

“We have recently been awarded some sizeable new projects, including an additional 140 MW in Kenya and 100 MW in Saudi Arabia,” said chief executive Rupert Soames. However, the Middle East business reported that revenue and trading profit were slightly down on last year, decreasing by 2% and 3% respectively.

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The trading margin increased slightly to 23.1% (2008: 22.5%), due partly to a high proportion of rental revenue. Rental revenue was up 3%, while services revenue decreased by 24%, driven mainly by a reduction in fuel revenue.

Power rental revenue increased 8%, reflecting strong activity levels in many Middle East countries. Temperature control revenue decreased by 28%, largely due to the completion of a number of large cooling projects in Dubai.

In geographic terms, revenue in Dubai fell significantly due to the rapid contraction of the construction sector, but this fall was offset largely by continued growth in other markets in the Middle East, which benefited from the ongoing flow of new construction projects, combined with buoyant activity levels in sectors such as oil and gas and utilities.