Babcock lowers FY profit guidance on oil & gas writedown
Engineering firm Babcock lowered its full year profit guidance range on Wednesday due to contract award delays in its aviation division and an £85m write down on oil and gas assets.
The company said it now forecast underlying operating profit of £540m compared with a previous range of £540m - £560m. Revenue guidance was unchanged at around £4.9bn.
The aerospace and defence contractor last week announced that Scottish chief executive Archie Bethel was retiring,
In a trading update for the first nine months of the financial year, Babcock said it had won or been selected as preferred bidder for aerial emergency services contracts worth around £600m in Italy and Spain.
However, delays in awarding them had pushed revenue in future periods.
“Oil and gas continues to be a tough market. The three large providers of helicopter services who operate worldwide in oil and gas have all emerged from Chapter 11 bankruptcy protection with reduced debt and written-down assets,” Babcock said.
“This has effectively reset global market pricing levels, forcing us to respond quickly to remain competitive. We will also exit our oil and gas businesses in Ghana and Congo.”