Power Generation Equipment Rental Company Peer Financials

Part
01
of four
Part
01

Aggreko

The information on Aggreko's financial records for their power generation rental business has been updated in rows 5-11, columns D-K of the attached spreadsheet. With an operating profit is £105 million (or $126 million) for its power rental segment, the genset rental fleet size is 10,009 MW.

AGGREKO: FINANCIALS

  • Aggreko's power rental original equipment acquisition cost / property and equipment (PPE) is £3,400 million (or $4.099 billion). Also, its net PPE or net book value is £1,057 million (or $1.274 billion).
  • The genset rental fleet size for Aggreko's power rental division is 10,009 MW.
  • The financial utilization of Aggreko's power generation rental segment was calculated as 24.18% while its time utilization is estimated as 66.61%.
  • Aggreko's EBIT or operating profit for its power rental division is £105 million (or $126 million).
  • Aggreko's intangible assets stand at £42 million or ($50.6 million).

RESEARCH STRATEGY

To address this request, we mainly leveraged on the company's most recent annual report and financials. Aside from the data addressed in this section, the rest were easily pulled from the annual report, such as the target segment's genset rental fleet size. Also, we have used an online currency exchange tool to convert all monetary figures in British Pound to the US Dollar.

For Aggreko's power rental original equipment acquisition cost, this figure was not explicitly provided in the company's annual reports. However, according to Investopedia, "the acquisition cost of property, plant, and equipment (PPE) recognizes any discounts or additional costs that the company will experience and is often referred to as the original book value of the asset in question." Furthermore, it provided the formula for finding the cost of PPE as below:

Net PPE = (Gross PPE + Capital Expenditures) − Accumulated Depreciation

However, since the requested data is the ":original" equipment acquisition cost, we opted for the 'Gross PPE,' which has not been adjusted or seen any deduction. With this, we found that under the 'Property, Plant and Equipment' section of its annual report, Aggreko reported that prior to any adjustments or deductions, the gross PPE or original equipment acquisition cost for its power rental division is £3,400 million (or $4.099 billion). Note that, the company also provided the net PPE or net book value as £1,057 million (or $1.274 billion), which can still be used to represent the original equipment acquisition cost.

For the target segment's financial utilization, the formula is given as the percentage of the ratio between the rental revenue and the original equipment acquisition cost. From Aggreko's annual report, its power rental segment generated £822 million (or $991 million) in revenue. Since the original equipment acquisition cost for its power rental division is £3,400 million (or $4.099 billion), its financial utilization is 24.18% (i.e., £822 million / £3,400 million = ~ 0.2418 * 100 = 24.18%)

For the time utilization, this data was not provided. While this quantity can be calculated as the percentage of the power capacity hours on rent divided by total power capacity, the company disclosed no information around its power capacity hours on rent. Hence, triangulating this data was a bit challenging. Moreover, research through other third-party industry and media reports yielded no pertinent information. Notwithstanding, we found in the company's annual reports that its average MW on hire is 5,296MW from diesel, 1,332MW from gas, 8MW from hybrid and 31MW from HFO. These sum up to an average of 6,667MW on hire. Assuming that this figure (6,667MW) is the average MW on hire over the year, 2018 (i.e., 6,667MW per), and the total power capacity is already given as 10,009 MW, therefore, the time utilization is 66.61% (i.e., 6,667MW / 10,009 MW = 0.6661 * 100 = 66.61%)

For the target segment's intangible assets, it was not disclosed in the company's annual report. However, we have provided the group's intangible asset figures as an alternative.

Lastly, the regional breakdown of this data is not available as only the regional revenue figures were disclosed. Hence, we have entered "N/A" into the respective cells.

Part
02
of four
Part
02

Atlas Copco

Atlas Copco's power generation rental business line is part of it's Power Technique business division. We use the terms "Power Technique" and "Power Generation" interchangeably herein. All the available, requested data points are included in the attached spreadsheet and listed below.

Findings

1. Original Equipment Acquisition Cost

  • According to our triangulated calculation, the original equipment acquisition cost for Atlas Copco's power generation rental business line is $2,219,717 (rounded to the nearest dollar).
  • For that calculation, we first found the total equipment, plant, and property assets acquired by the Power Technique business division in 2018, which equated to $7,654,196 ($73 million Swedish Krona). There was no listing just for the equipment, so the aforementioned category was the closest we could get to equipment.
  • Next, we found that rentals account for 29% of the Power Technique division's revenue.
  • Accordingly, we multiplied $7,653,196 by 0.29, which equals $2,219,717 (rounded to the nearest dollar), which is the triangulated original equipment acquisition cost.

2. Genset Rental Fleet Size

  • We could not find any information whatsoever about a genset rental fleet size for Atlas Copco, let alone its power generation rental business. We looked for that information by searching the company's website, reviewing its most-recent annual report, and looking for any articles about such. However, we didn't find a single mention of genset pertaining to the company in any one of those sources that we reviewed.

3. Financial Utilization Rate

  • According to our triangulated calculation, the financial utilization rate for the power generation rental business line is 164.96% (rounded to the nearest hundredth).
  • To calculate that value, we first needed to determine the revenue for the power generation rentals business line. For that, we found the Power Technique division's 2018 revenue ($1,262,627,784; $12.042 billion Swedish Krona) and the share that rentals have within that division's revenue (29%). We then multiplied $1,262,627,784 by 0.29, which equals $366,162,057 USD (rounded to the nearest dollar; triangulated revenue for the power generation rental business's revenue).
  • With those values, we were then able to calculate the financial utilization rate by dividing the business line's rental revenue ($366,162,057) by the original equipment acquisition cost previously calculated ($2,219,717), which equals 164.96(%).

4. Time Utilization Rate

  • We were unable to determine the time utilization rate for the power generation rental business line.
  • We looked for that information by reviewing the company's 2018 annual report, searching the company's website, and looking for any available articles on this topic as related to the company. However, we didn't find a single source containing any such information pertaining to the company, let alone its power generation rental business.
  • The only mentions of mega watts in the company's annual report pertained to the company's energy consumption for its production processes, as related to sustainability. In our press searches, we only found information about the actual equipment comprising the company's rental fleet, but that information had nothing to do with power capacity hours or similar.

5. EBIT

  • According to our triangulated calculation, EBIT in 2018 for the power generation rental business was $60,996,602.
  • For that calculation, we first found the Operating Profit value for the Power Technique division, which was $210,333,112 ($2.006 billion Swedish Krona).
  • Since rentals account for 29% of the Power Technique division's revenue, we multiplied the division's Operating Profit ($210,333,112) by 0.29, which equals $60,996,602 (rounded to the nearest dollar).
  • We used Operating Profit for this calculation because it is the same value as EBIT.

6. Total Capital

  • According to our triangulated calculation, the power generation rental business line's total capital amounted to $38,586,585 (rounded to the nearest dollar) in 2018.
  • For that calculation, we first found the total capital for the Power Technique business line overall, which was $133,057,188 USD ($1.269 billion Swedish Krona).
  • Since total capital was not provided for that business line's rental segment specifically, we multiplied the aforementioned total capital value for the overall business line ($133,057,188) by 0.29 (because rentals account for 29% of the Power Technique division's revenue), which equals $38,586,585 (rounded to the nearest dollar).

7. Intangible Assets

  • According to our triangulated calculation, the Power Technique rental division had net intangible assets worth $109,556,709 in 2018.
  • For that calculation, we first found the company's net intangible assets overall, which totaled $3,148,181,300 ($30.025 billion Swedish Krona).
  • Next, we found that the Power Technique division accounts for 12% of Atlas Copco's net revenue.
  • Accordingly, we multiplied the company's net intangible assets ($)3,148,181,300 by 0.12 (representing Power Technique's 12% share), which equals ($)377,781,756 (representing net intangible assets for the Power Technique division).
  • Next, since rentals account for 29% of the Power Technique division's revenue, we multiplied the previously calculated net intangible assets for the Power Technique division (($)377,781,756) by 0.29 (representing rentals' 29% share of net Power Technique revenue), which equals ($)109,556,709 (rounded to the nearest dollar; triangulated intangible assets for Power Technique rentals).

Your Research Team Applied the Following Strategy:

For the five financial data points that we were able to calculate above, all required triangulated calculations. It was necessary for us to do so because Atlas Copco does not directly publish those data points pertaining to its power generation rental business specifically. However, we were able to use financials pertaining to the company's Power Technique division and rentals' share within such division to conduct triangulated calculations for five of the requested financials. For those calculations, the source that we used was Atlas Copco's 2018 annual report. As is explained above, we were unable to directly find or triangulate values for time utilization rate and genset rental fleet size. We included explanations of our research methodologies in looking for information about those financials above for clarity. All the values provided above are in USD unless otherwise noted.
Part
03
of four
Part
03

Bredenoord

Unfortunately, there was no financial data publicly available for Bredenoord. There was no financial information located other than their 2018 revenue of USD 74.53 million. More information can be found on the attached spreadsheet, as well as, below.

BREDENOORD

  • According to Hoovers they made USD 74.53 million in revenue in 2018.
  • They are considered a parent company with three subsidiaries and one branch.
  • Their international rental fleet consists of more than 2000 pieces.
  • They offer 13 categories for rentals including generators, fuel tanks, and cables.
  • Bredenoord also offers 24/7 services like transport and delivery and fuel services.

RESEARCH STRATEGY

Your research team began by reviewing the Bredenoord website. Most public companies post their financial statements or investor presentations within their websites. Unfortunately, this company does not make this information public. All that was found relating to their rental business were case studies, product listings, and other information.

Since the company website didn’t have any financial information, the next strategy was to review business databases and indexes like Crunchbase, Bloomberg, and Hoovers. The company’s revenue, business structure, and other information were found, but there was no other financial data located.

All companies must file some type of financial information with their local governments. The entity to which Bredenoord files its financial data is Kyckr. A company search was performed on Kyckr to find the company's financial data. There were some annual filings available for download, but they were behind a paywall. The Netherlands government website was also reviewed, but there was no company registry search publicly available on that site either.
Part
04
of four
Part
04

Jassim Transport

After intensive research, Jassim Transport's genset rental fleet size for its power generation rental business ranges from 70 MW (or 70,000 KVA) to 875 MW (or 875,000 KVA). However, information on its power rental original equipment acquisition cost, financial utilization, time utilization, EBIT, the total capital, and the intangible assets were largely unavailable. This information has been updated in row 18, columns D-K of the attached spreadsheet.

JASSIM TRANSPORT'S POWER GENERATION RENTAL SEGMENT: FINANCIALS

  • In 2018, Jassim Transport's (JTC) power rental segment procured "102 new units of Cummins diesel generators, thereby taking its total fleet strength to over 700 units with capacities ranging from 100 KVA to 1250 KVA."
  • Calculations show that Jassim Transport's power generation rental segment's genset rental fleet size ranges from 70 MW (or 70,000 KVA) to 875 MW (or 875,000 KVA).
  • "JTC’s power rental fleet includes a wide range of assets such as low capacity (30 KVA to 250 KVA), medium-capacity (300 KVA to 500 KVA) and high capacity (600 KVA to 1250 KVA) generators, transformers and switch gears, eco-friendly fuel tanks, panels, and cables."

JASSIM TRANSPORT'S: FINANCIALS

  • In its 2017 fiscal year, Jassim Transport generated KD 24.1 million (or about $79.2 million) in revenues, KD 7.8 million (or about $25.6 million) in net profits, KD 6.6 million (or about $21.7 million) in cash dividend and KD 43.0 million (or about $141.3 million) in total shareholder equity.
  • Some of its "notable investments during 2017 include the addition of a new 700 Ton mobile crane and the purchase of over 100 generators."
  • Following Qurain Petrochemical Industries Company's (QPIC) "acquisition of a 60% stake in Jassim Transport & Stevedoring Co. K.S.C.C. (JTC)" during the first quarter of 2019, QPIC's consolidated assets grew by 9% as a direct result.

RESEARCH STRATEGY

To address this request, we commenced by searching through Jassim Transport's official website for its annual reports and/or investor filings that contain its financial records but could not find any of these, as Jassim Transport is privately-owned. This approach only linked us to information on the company's business segments including ports management, contract logistics, equipment leasing, and power rental. This also led us to identify the Global Investment House and BoodaiCorp as its investors. While we could review these companies and some of their annual reports for any relevant information on the requested data, we could not find any.

Next, we searched through the company's media releases for any mention of the requested data points such as the power rental original equipment acquisition cost, financial utilization, among others. However, we could not find any relevant information, as the majority of its announcements revolve around the acquisition of new equipment and other news related to equipment. While we could find a press release on the summary of its 2017 financial records, there was no other relevant information on the requested data around its power generation rental business segment. Also, while the company expressed "its intent for an initial public offering and listing on Boursa Kuwait," it appears to not have achieved this as it is not yet listed on Boursa Kuwait.

Next, we searched for the company's financial records through third-party media reports and industry reports but found no relevant information. However, we found that in early 2019, Global Investment House transferred 60% ownership of Jassim Transport to Qurain Petrochemical Industries Company (QPIC), a public company, making GPIC the majority shareholder. Hence, we searched and found that its most recent financial report was for the first quarter of 2019-20 (April-June). However, this report did not provide any relevant information around any of the requested data. It only provided information on the impact of Jassim Transport on its consolidated assets due to the transfer.

Next, we attempted to individually search for each of the requested data, from the power rental original equipment acquisition cost to the target segment's intangible assets. We attempted this by searching through industry reports and other third-party media reports. With this, we could find some pieces of information which we used to obtain the target segment's genset rental fleet size (see calculations section below). However, no other pertinent information could be obtained. Most financial records of the company focus on its general top-line and bottom-line figures such as the revenue and net profits. Hence, figures such as the target segment's total capital, intangible assets, and EBIT were not available.

Since Jassim Transport is a Kuwaiti company, we targeted local news reports by conducting our search in the Arabic language by using an online translation tool, but there was no additional relevant data that could be obtained nor data that could be used to triangulate a reasonable estimate of the requested information (except the genset rental fleet size).

Lastly, carrying out a triangulation attempt on the rest of the requested data (except the genset rental fleet size) was quite challenging as many of the required data would have to be publicly released by the company itself, in addition to the general unavailability of relevant financial records beyond the company's top-line and bottom-line figures. For example, to triangulate the target segment's financial utilization, its rental revenue and the original equipment acquisition cost are needed. However, none of these data points are publicly available. Also, to obtain the time utilization, the power capacity hours on rent and the total power capacity are needed. However, while the total power capacity could be estimated, the power capacity hours on rent is not available.

Furthermore, shifting our focus from its power generation rental business segment to the general business operation of the company made no difference, as some requested data points, such as the time utilization and rental utilization, are applicable terms to only the power generation rental segment. Hence, it wasn't feasible to calculate an estimate by narrowing any of the requested data (except the genset rental fleet size) for the general company down to the power generation rental segment. Therefore, apart from the genset rental fleet size, we've entered "N/A" into the appropriate cells for the power rental original equipment acquisition cost, financial utilization, time utilization, EBIT, the total capital, and the intangible assets.

Monetary figures in Kuwaiti Dinar (KD) were converted with an online exchange tool to the USD.

CALCULATIONS

According to Kuwait Times, Jassim Transport's (JTC) power generation rental segment "completed the procurement of 102 new units of Cummins diesel generators, thereby taking its total fleet strength to over 700 units with capacities ranging from 100 KVA to 1250 KVA."
Therefore, using 100 KVA and 1250 KVA as lower and higher boundaries, we expressed the total capacity as a range assuming that there are at least, either 700 units of 100KVA generators or 700 units of 1250KVA generators. This amounted to a fleet capacity range of 70,000KVA (i.e., 700 * 100KVA = 70,000KVA) to 875,000KVA (i.e., 700 * 1250KVA = 875,000KVA). Since 1 KVA = 0.001 MW, therefore, Jassim Transport's power generation rental segment's genset rental fleet size ranges from 70 MW to 875 MW (i.e., 70,000 * 0.001 MW = 70 MW and 875,000 * 0.001 MW = 875 MW).
Sources
Sources