Sector News

Wood Group saves $50m as boss sees signs of ‘modest recovery’

August 16, 2016

Wood Group’s boss said today that the company was seeing early indications of modest recovery in “some areas” of the business after cutting costs by $50million in the first half of the year.

The Aberdeen-headquartered energy service giant put the savings down to “on-going reorganisation, delayering and back office rationalisation”.

The company’s headcount shrank by a further 10% during the six months.

Group revenues fell 17% to $2.56billion against the first half of last year as challenging conditions prevailed in the oil and gas sector.

Pre-tax profits dropped by $60million to $100million.

The group’s PSN production services division was affected by continued pressure on volumes, scope and pricing in the North Sea and US onshore in the Americas, a spokesperson said.

The company stuck to its full-year outlook, anticipating Ebita down by around 20%.

Wood Group, which today said it had won a $700million contract for a project in Kazakhstan, also announced a 10% increase in its interim dividend to 10.8 cents.

Chief executive Robin Watson said: “Performance in the first half of 2016 reflects the balance of a challenging oil and gas market, our continued focus on utilisation and cost management and the benefits of our flexible, asset light model.

“Our overall outlook for 2016 remains unchanged; with full year EBITA anticipated to be around 20% lower than 2015, in line with previous guidance.

“Looking further ahead, we see early indications of modest recovery in some areas and believe our customer relationships, geographic footprint, strong financial footing and relentless focus on delivering value through our asset life cycle services and specialist technical solutions, position us well.”

By Mark Lammey

Source: Energy Voice

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