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Lower activity by operators

Wood profits to fall 20% amid tough conditions

Wood Group PSNOil services company Wood Group expects underlying profit this year to fall by 20% amid “challenging conditions” in the sector.

It said the “tough operating environment in the North Sea has persisted and we are seeing additional pressure on margins.”

The lower earnings are in line with expectations and result from lower activity by operators, it said in a statement issued to shareholders at the annual general meeting.

It said: “Our continued focus on reducing costs, improving efficiency and broadening our service offering through organic initiatives and strategic acquisitions, positions us as a strong and balanced business in both the current environment and for  when market conditions recover.”

The company recently extended its $950m bilateral bank facilities until 2021 at the same competitive rates.  The balance sheet strength, cashflow generation and longer term confidence support the board’s intention to increase the dividend per share by a double digit percentage in 2016.

A trading update for the first half of the year will be provided on 30 June.

As previously announced, David Woodward will retire from the Board at the AGM and Jann Brown will take over as senior independent director. Richard Howson, chief executive of Carillion, will join the board on 12 May and will also join the nomination and safety, assurance & business ethics committees.

 



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