Page last updated at 17:36 GMT, Thursday, 15 October 2009 18:36 UK

Temporary power firm sees light

Aggreko site outside Beijing Olympic Stadium
Aggreko has secured a number of key contracts in Africa

Glasgow-based temporary power supply company Aggreko has seen longer-term contracts drive up profit expectations.

The company had faced a steep decline in its core business.

Aggreko provides power generation following natural disasters and to major events, but had seen its revenues fall.

However, improved margins have boosted the firm's confidence of delivering higher profit this year than it achieved in 2008.

That is despite last year's surge in activity around its supply of temporary power plants to the Beijing Olympics, while a quieter hurricane season in the US has reduced demand for temporary generators this year.

Aggreko's temperature control plant has also been in less demand, due to lower ambient temperatures in its main markets, with third quarter performance looking "very poor".

African contracts

This year, its high profile activities have included the power supply to President Obama's inauguration in January.

It has won a large contract to supply longer-term power supplies to Kenya's electricity grid, to cut down on the African nation's power cuts.

Aggreko is also a major player in handling electricity shortages in Tanzania and Ethiopia.

That division of the company handling longer-term contracts, known as International Power Projects, was the strongest performer. Revenue was up about 10% and orders for new work are improving.

In a statement for the London Stock Exchange, covering trading from July to September, the company reported group revenue was down 16% on a comparable basis with the same quarter last year.

The company manufactures most of its plant in Dumbarton, where it opted last year to expand, with a £20m investment.

That secured 230 jobs and was expected to increase staff by as much as 300, though this year has seen Aggreko cut back on capital expenditure in order to reduce its debt.

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