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Oil industry downturn hits profits at Aggreko

Published: 11:00 24 Jul 2015 BST

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Lower investment by US oil and gas firms has hit Aggreko

Electricity generator hirer Aggreko (LON:AGK) blamed Middle East unrest and slower US oil and gas business for a profit warning, hitting its shares.

Aggreko said ongoing security problems in Yemen had stopped it operating at full capacity and it was concerned about the impact for the rest of the year.

The group said there had been another slowdown in its US shale oil & gas business since May, when volumes and pricing started to fall.

It has taken a hit as the oil & gas industry has reduced investment in plant and equipment due to falling oil prices.

Aggreko added: "More recently, we have begun to see an impact on our offshore oil and gas business in the Gulf of Mexico."

The company also said trading terms for anticipated extensions to gas contracts in Bangladesh were now likely to be worse than expected.

"While we will be seeking to mitigate the profit impact by reducing operating costs, there will be a net adverse impact on profits this year and in 2016," it said.

The company said the issues would result in annual pre-tax profits of between £250mln and £270mln, 8% lower than markets had hoped.

Shares in Aggreko fell 203p or 14% to 1227p in mid-morning London trading.

Market analyst Alastair McCaig at spread-betting firm IG said: "This morning’s profit warning from Aggreko is yet another reminder that the heady days of 2012 and the London Olympics are well behind them."

 

 

 

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