Aggreko ups investment as business grows

Aggreko has significantly increased fleet investment in the first nine months of the year with a focus on Tier 4 Final and Stage V gensets for North America and Europe and temperature control equipment in North America.

The private equity owned business spent US$304 million on fleet in the first three quarters of the year, up 38% on the same period in 2022. Of that, the majority - $167 million - was growth CapEx, with the $137 million balance on fleet renewal.

Aggreko generators at the UK Open Golf Championship in St Andrews in 2022. (Photo: IRN)

The company’s growth plans come on the back of 17% revenue growth to $1.86 billion in the nine month period. Underlying growth was 9%, which excludes the impact of the recent acquisitions of Resolute and Crestchic and the 2022 Beijing Olympics. EBITDA profits rose by 33% to $714 million.

Both Europe and North America and Europe grew strongly for Aggreko. North American revenues were up 13% to $678 million, supported by higher rental rates and activity in oil and gas and utilities. In Europe, sales rose by 13% to $376 million, driven by manufacturing, utilities and petrochemical and refining sectors.

The company continues to invest in lower carbon technologies. In October, its Energy Transition Solutions (ETS) business acquired nine community solar projects in the state of New York, totalling 59MW.

These projects, which are at different stages of construction, will be managed by ETS and are expected to be operational before the end of 2024. Aggreko said the investment was “an important milestone for our ETS business and reinforces our strategic capabilities as an energy solutions provider within the renewable energy space.”

At the same time, the company sees opportunities to hybridise existing and new power installations in Australia’s mining sector. It recently won a 10 year contract to add 10.4MW of solar power to an existing 24MW Aggreko power plant supplying a mine and the residents of a nearby town.

Aggreko said it has a “strong pipeline of hybrid opportunities and are in the final stages of negotiations on four long term solar (c. 35MW) and storage (c. 26MW) hybrid contracts.”

In a recent presentation the company said its business was operating in the context of increasing demand for power worldwide.

It said global power demand would increase by two and a half times by 2050 (driven by data centres, commercial buildings, H2 production, EV charging); that grid connection delays in developed nations were creating demand for ‘bridging’ temporary power solutions; and that there would be a global power shortage of between 1000GW and 4000GW by 2030, given currently planned investment in power infrastructure.

Aggreko buys HVAC specialist in USA Florida acquisition is significant, with US$440 million value
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