August 26, 2008

Scots Businesses Are Powering Ahead

By Hamish Rutherford

THREE of Scotland's largest non-financial companies kick off a busy week of reporting in London today.

Cairn Energy, Scotland's largest oil and gas company, Wood Group, the oil and gas services company which joined the FTSE-100 earlier this year, and Aggreko, the temporary power provider, are all reporting half-year results.

The focus for investors in Edinburgh-based Cairn Energy is likely to be progress on its pipeline to transfer oil from its massive but remote Rajasthan fields to coastal refineries.

Cairn was finally given regulatory clearance to recover the cost of the pipeline earlier this year, and has begun awarding contracts for its construction. The group is also currently conducting an international search for several hundred employees to manage the building of the pipeline.

The company may also give an update on its exploratory work in offshore Greenland, which began earlier this month.

Aberdeen-based Wood Group is expected to report a major boost in profits for the first half, with record investment as crude prices soared in the six months to 30 June.

Analysts at Evolution Securities are forecasting first half profit before tax of GBP 180 million (GBP 97m) for Wood, a 37 per cent increase over the first half of 2007.

But investors will be looking to the group's outlook statement, with fears a recent fall in crude prices could see oil producers scrap some projects.

Glasgow-based Aggreko is also expected to report a bumper rise in profits on continued growth in demand for its generators, in particular in Africa .

Analysts expect Aggreko to report underlying pre-tax profits of GBP 68m for the six months to 30 June, a 40 per cent increase on last year's GBP 48.3m on revenue of GBP 400m.

The group has also been boosted by deals to manage major sporting and cultural events, which included the European Football Championships and the Glastonbury music festival. More recently Aggreko provided power to the Beijing Olympics.

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