On-site power provider Aggreko suffers impact of Yemen crisis

Shares in Aggreko have taken a heavy fall as concerns grew about the exposure of the company to the escalating conflict in Yemen.

The temporary power provider may have to pull out of the country and saw its shares slide 52p, or 3.3pc, £15.43 - the worst performance of any stock in the benchmark index on Thursday - after smaller rival APR Energy said it had stopped operations in the Middle Eastern nation because of the worsening conflict.

The Telegraph quotes Jefferies analyst Will Kirkness as saying that Aggreko may follow suit.
Aggreko engineer
“Aggreko have 120 MW in Yemen and unlike APR are using a locally contracted company to operate it,” he told investors. “With APR ending their contract on security concerns we believe Aggreko could look to take similar measures.

“Although employees are not at risk, the escalation in the conflict raises concerns about the viability of the contracts and the security of assets.”

A Saudi-led coalition last month started bombing Shia-led militia in Yemen, a country that accounts for 2 per cent of the megawatts on rent across Aggreko.

For APR, withdrawal from the country is likely to strike a bigger blow as it was only in January that the business was forced to scrap operations in Libya, ending its biggest contract.

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