Aggreko share value hit by profit warning
Scotland-based temporary power company Aggreko has suffered a slump in its share valuation after warning of a dip in profit this year.
The energy firm reported a 24% drop in pre-tax profits for 2016 to £172m - much of that explained by the weak oil drilling and refining markets in the United States.
It reduced the valuation of its US assets by £30m, though it said there were signs of that market recovering.
Revenue fell in 2016 by 3% to £1.5bn.
Aggreko said trading conditions were particularly difficult in South America, with a renegotiation of a contract to supply power in Argentina. European trading was stronger.
The figures lacked the boost Aggreko gets regularly from supplying power to the Olympics and Winter Olympics. Comparisons with 2015 looked poorer because that year included temporary powering for the European Games.
The company pulled out of bidding for the 2016 Rio de Janeiro games, complaining that the bidding process was running too late and was disorganised.
Full year profit
Aggreko, which is headquartered in Glasgow with a generator assembly plant in Dumbarton, intends to cut annual costs by £25m, starting in the second half of this year.
Commenting on current trading and outlook, chief executive Chris Weston said he expected the cost cutting to help the firm achieve growth in 2017: "However, this will be more than offset by the significant impact of Argentina, and as a result we expect full year profit before tax and pre-exceptional items to be lower than last year."
As a response to the results announcement, Aggreko's share price dropped by 11%.
Mr Weston added: "Whilst the trading environment over the last 12 months has been challenging I am pleased with the progress that we are making across the group, implementing our transformation programme to return the business to growth.
"We are investing in the right technologies to reduce costs to our customers, improving our customer focus and delivering efficiencies."