APR Energy Surge in Contract Wins Offset Lower First-Half ProfitEshe Nelson
APR Energy Plc, a U.K. supplier of temporary power generators, won a 72 percent increase in new contracts in the first half of the year, easing the pain of lower revenue and profit.
The company signed 593MW of new deals in the six months through June, more than in the whole of 2012, with an additional 111MW in extensions, London-based APR said in a statement today. The wins included a 200MW addition to a contract in Libya, bringing total generation capacity in the North African country to 450MW. Uruguay became the company’s second-largest market after two 100MW sites went into operation.
“This was a transformative period for the company,” Chief Executive Officer John Campion said in a phone interview today. “Libya and Uruguay came online. We put 450MW into Libya in approximately 90 days. 450MW would be bigger than Battersea power station was at a time.”
APR first-half revenue fell 44 percent to $87.2 million after the end of a Japanese contract that accounted for 40 percent of 2012 sales, the company said. Operating profit was more than ten times lower at $400,000. Full-year sales will probably be $321 million, according to the median estimate of nine analysts surveyed by Bloomberg.
“While the headline interim results do not look very pretty, the results in the second half should be materially better and we are not likely to change our full-year underlying forecasts,” John Lawson, an analyst at Investec, wrote in a note to clients. Lawson has a hold recommendation on the stock with a target price of 900 pence, which is under review.
APR shares advanced as much as 6.1 percent, the biggest intraday gain since July 4, and traded 5.4 percent higher at 1023 pence at 11:30 a.m. in London. The stock has gained 26 percent this year, valuing the company at 799 million pounds ($1.2 billion).
APR announced 147MW in new contracts today for power projects in Mozambique, Indonesia and Senegal. The company is focused on emerging markets that need electricity to support long-term infrastructure projects, Campion said. The financial impact of these awards is not expected to be felt until 2014, the company said in a statement.