Shares of power equipment supplier Aggreko plc (LON: AGK) are climbing on Wednesday after the company said it has now agreed and signed the necessary contract revisions with The Tokyo Organising Committee of the Olympic and Paralympic Games.
The contract with the committee reflects both the scope of the changes and the impact of the Games' delay into 2021 following the coronavirus pandemic.
The UK based firm’s revenue from the deal is now projected to be approximately $315 million with the group’s profit before tax for 2021 expected to be between £170-190 million if the Games go ahead.
However, there is a real risk that the Games will need to be delayed further with Japan seeing record highs for cases and deaths in the last couple of days and the country’s government weighing up whether to go into a state of emergency.
Japanese Prime Minister Yoshihide Suga did, however, insist that the Games will go ahead in July in his written statement for the New Year.
“The Tokyo Olympic and Paralympic Games will be held this summer,” said Suga.
“We will make steady preparations to realise a safe and secure tournament,” added the Japanese PM.
Aggreko is also pushing ahead with preparations for the event in July.
“As we confirmed in our third quarter trading announcement on 17 November 2020, our preparation work for the Games continues to progress well and we remain confident of delivering to the revised schedule,” the company said in a statement.
Aggreko’s stock price jumped as high as 666.5p after the news. However, it has given up most of those gains and is trading at 651p per share, up 1.80%.
