AGK.L Share News (AGK)

(Sharecast News) - Temporary power provider Aggreko withdrew its 2020 guidance on Monday and suspended its dividend due to the coronavirus.
The company said the impact of the outbreak on its revenue since its last update on 3 March has been limited and what it has experienced has been mainly in the events sector.

"However, as central governments and businesses take further action to contain and delay the spread of the virus, there is now significant uncertainty around future demand across several sectors and geographies," it said, noting that the recent slump in oil prices has compounded uncertainty.

"Additionally, we are beginning to face some operational challenges getting our people to project sites as countries close borders and restrict travel. In terms of our supply chain, there has been relatively little impact to date although, specifically, we are experiencing delays of a few weeks in equipment orders from China."

The company said it was continuing its work in support of delivering the Tokyo Olympic Games, which are due to start on 24 July.

Aggreko insisted that it is in a "strong" financial position, with immediately available liquidity of ?606m as at the end of February. Even in the reasonably probable worst case scenario, with appropriate mitigating actions, it expects to remain within its financial covenants, while maintaining headroom under its existing committed facilities.

Nevertheless, it has decided not to pay a final dividend and withdrew the 2020 guidance given earlier this month.

"We are in a strong financial position as we face the challenges presented by the spread of the virus," it said.

"Notwithstanding this, our initial priority has been to understand better the potential impact on the group's financing and liquidity, and to take prompt action to preserve Aggreko's financial position. These measures have included, but are not limited to, a detailed review of and reduction in discretionary spend, hiring freezes, travel restrictions and the limiting of our fleet capital expenditure to that required to fulfil secured orders and meet known demand."