Disappointing first half earnings from emergency power generator Aggreko (AGK) send the shares 12% lower to £10.82.
The company’s revenue is 12% lower year-on-year, contributing to pre-tax profit slumping 40% to £61 million.
Aggreko has blamed a difficult trading environment and lower oil prices for the disappointing results, but will hold its guidance for the full year. It expects pre-tax profit to be lower than last year on an underlying basis, as previously indicated.
Berenberg says the half-year results are disappointing, but is encouraged by a very strong order intake in the utility business of 875 megawatts, which is significantly higher than 451 megawatts in 2015.
In North America, revenue from rental solutions has fallen by a fifth. It has been driven by an upstream oil and gas decline from 2015 and slower performance from petrochemicals and refining.
The firm says revenue generated from industrial power solutions fell by 12% as the Latin America markets were challenging, while Russia and Africa performed well.
However, the power solutions industrial division is expected in improve in the second half of 2016 as a result of new contracts in Eurasia and the Middle East.
Aggreko’s revenue has also been hit by the underperforming utility division, which was affected by Bangladesh contract renewal and off-hiring of Mozambique and Panama contracts.