London: APR Energy Plc, a supplier of temporary power plants in some of the world’s most unstable countries, said it was boosting spending on insurance and security following a surge in violence in Libya, raising concerns about its costs and margins.
Shares in APR, which also announced a management shakeup, fell as much as 12 percent, making them one of the biggest losers on the London Stock Exchange yesterday.
APR has power plants at six sites in Libya with a capacity to supply a total of 450 megawatts. The contract, the company’s biggest, was key to APR’s swing to profit last year.
The company, whose business mainly involves renting out 25-megawatt turbines and generators to help customers overcome short-term electricity shortfalls, also operates in countries such as Iraq and Yemen and has a strong presence in Africa.
APR said Chairman Mike Fairey had been replaced by company cofounder John Campion, who was chief executive.
The company’s other founder, Laurence Anderson, will become chief executive while Lee Munro, senior vice president of strategy and systems, will fill the vacant role of chief financial officer.
Anderson, who was APR’s president, said Fairey’s departure after three years on the job was “a natural transition” and that a succession plan had been in place for some time.
However, analysts expressed surprise at the changes.
“Several internal succession changes will be viewed negatively from a corporate governance perspective but provide continuity,” said Liberum analysts, who have a “sell” rating on APR’s stock.
Anderson said that as CEO he would seek longer-term projects and aim to build up APR’s business in North America, Europe and developed Asian markets.
The company’s contract in Libya, which has been revised twice, is due to expire in the first quarter of next year. “To this point we are comfortable (in Libya)...” Anderson said.
Anderson said the outbreak of Ebola in West Africa had restricted travel, meaning there was less clarity on the timing of contracts APR was hoping to win in the region.
Demand for quick, short-term power supplies in developing markets has rocketed as economies grow more quickly than permanent power plants can be built, creating opportunities for APR. But that has also taken it into more developing markets, such as Libya and Iraq, where political risks abound.
Reuters
