APR Energy reports strong revenues as CFO makes exit

APR Energy, the temporary power specialist, has posted a significant leap in reported revenue for the six months ended June 30th as it announced the departure of the Finance Director.

APR Energy, the temporary power specialist, has posted a significant leap in reported revenue for the six months ended June 30th as it announced the departure of the Finance Director.

Rich Greene, who will leave at the end of September, has been replaced by the company's Vice President of Finance, Andrew Martinez.

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Gross profit on a pro forma basis increased 282% to $75.7m, largely as a result of the Japan TEPCO contract. One of the TEPCO sites was terminated early, and will have a negative impact on second half income, while an extension was signed for the other site until at least March of next year.

Return on capital employed (ROCE) increased to 18.2% (31 December 2011: 16.5%, 30 June 2011: 13.2%) despite the significant increase in net operating assets associated with the growth of the business.

During the period 344MW of new contracts were awarded, compared to 513MW for the whole of 2011. New contracts worth 25MW and extensions worth 83MW were awarded since the period end, which Peel Hunt said "will disappoint some".

John Campion, Chief Executive Officer, said: APR Energy has continued to make good progress during the first half of 2012... We have significantly improved EBITDA margins, reflecting the discipline with which we have taken on new business and improvements in our operational structure and mobilisation technologies. Underlying revenue in the second half of the year will be lower than the first half due to early closure on one Japanese site and contractual project delays, nevertheless, we currently anticipate beating consensus net income.

"We see 2012 as an important year of investment for the future growth of APR Energy. The longer term key growth drivers of the temporary power business remain strong. With the Hub strategy now largely completed, today we are announcing an expansion in our planned fleet investment to $290-310 million for 2012. The additional expenditure will be focused on our dual-fuel technologies reflecting confidence in the natural gas market for which we feel APR Energy is uniquely positioned."

The firm is carrying out planned fleet investment of $290-310m for 2012 (previous guidance $230-260m), saying it believes the prospects for natural gas and dual fuel turbine temporary power continue to improve. During the first half, capital expenditure in the fleet was $147.1m in a mix of diesel engines and dual-fuel turbines.

At the period end the group balance sheet had gross debt of $104.5m (excluding capitalised financing costs) and cash of $33.6m, resulting in net debt of $70.9m.

New CFO Andrew Martinez, who joined the firm in October 2011, has been instrumental in successfully implementing a number of key financial reforms within the group over the past six months.

The share price rose 2.45% to 712p by 14:55.

NR

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