NEW Aggreko chief executive Chris Weston has highlighted the company's concern over the recent fall in oil price and the security situation in Libya as the temporary power specialist reported a 13 per cent fall in profits.
Mr Weston sounded the note of caution as he made his first appearance before analysts since taking over from long-standing boss Rupert Soames in January.
The former Centrica executive was speaking as the FTSE-100 company reported pre-tax profits of £289m for 2014 - down from £333m the year before.
Group revenue increased was broadly unchanged at £1.58bn on a reported basis.
Mr Weston said he has been encouraged by the start to 2015. Aggreko has won contract extensions in Argentina, the Ivory Coast and Japan and secured contracts to provide power to the inaugural European Games and PanAmerican Games. The athletics events are expected to bring in revenue of around £24m between them.
Aggreko said the recent fall in oil prices, which has led to major job and contractor salary cuts in the North Sea, has had "little impact" on the current year so far. But Mr Weston said it was a concern.
He said: "I am encouraged by the performance in the first couple of months of the year. We have secured important extensions, our project order intake has been good, and volumes on rent are up in our local business. I recognise, however we are early in the year, and much remains to be done.
"I am also mindful of the fall in the oil price and the ongoing security concerns in a number of our markets, in particular Libya, do create some uncertainty, both of which we are monitoring closely."
Aggreko said its local division, which includes temporary power solutions to sporting events, had booked underlying revenue of £904m, up eight per cent. Business was boosted by projects to deliver broadcast power for the World Cup in Brazil, and the Commonwealth Games in Glasgow, which brought in a combined £19m.
In power supply, which covers larger scale projects, underlying revenue grew 10 per cent at £625m. This was boosted by a major diesel contract in Panama and full year contributions of gas contracts in Mozambique and Ivory Coast.
The company, which said its 2014 performance had met management targets, noted that two of his three regions had performed well.
In the Americas, there was 19 per cent growth in underlying revenue growth and a 17 per cent increase in trading profit, while in Europe, the Middle East and Africa (EMEA) underlying revenue was up nine per cent and trading profit by 10 per cent.
However, Aggreko cited challenges in the Asia Pacific region, where its performance was impacted by the slowdown in the Australian mining industry. Underlying revenue fell by 13 per cent, with a 42 per cent reduction in trading profit.
Chief financial officer Carole Cran said the weakening of the US dollar, Argentinian Peso, Australian dollar and Brazilian real hit revenue by £126m and trading profit by £40m. Currency headwinds had also cut earnings per share by 10 per cent, she said. Ms Cran noted that Aggreko had delivered £200m or 75p per share to shareholders via a special dividend during the year, taking the total dividend to 102p per share.
Shares in Aggreko closed down 11p at 1,625p.
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