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Reuters Staff - Argentina hit drags down Aggreko's first-half profit

Petroleumworld 08 03 2017

Aggreko, the world's largest temporary power provider, said its first-half profit fell 10 percent, hurt by discounts it had to make to win a contract in Argentina, the company's single largest market.

The British firm, whose kit powers major events and covers electricity shortfalls, said pretax profit before exceptional items fell to 63 million pounds ($83 million) in the six months ended June 30, from 71 million pounds a year ago.

Group revenue rose 16 percent before exceptional items to 792 million pounds. Excluding fuel and currency movements, revenue was in line with the prior year, Aggreko said, adding that the results met market expectations.

While Aggreko has battled lower demand for its generators from North American oil and gas customers due to slumping commodity prices, it has more recently had to price in a "significant" discount to secure a contract in Argentina.

This move led Aggreko, which counts Argentina as its single largest market, to warn earlier this year that it expected 2017 profit to be lower than a year ago.

"I am confident that the changes we have made in the last two years are delivering results, with our first-half performance supporting our view that, Argentina aside, we will grow this year," Chief Executive Chris Weston said, adding that the company expects to meet full-year targets.

Analysts' average expectation is for a full-year pretax profit of 203.6 million pounds and revenue of 1.62 billion pounds, according to a company-compiled consensus. ($1 = 0.7572 pounds)

Reporting by Esha Vaish and Rahul B in Bengaluru, editing by Louise Heavens from Reuters.

reuters.com 08 02 2017

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