Wood Group more cautious as work in North Sea, Saudi Arabia slows
Wood Group (John)
147.00p
16:40 26/04/24
First half trading at Wood Group was weaker than expected because of a large drop in projects and modifications work, especially in the North Sea, leading the company to adopt a more cautious stance on the full-year outlook.
FTSE 250
19,824.16
16:59 26/04/24
FTSE 350
4,470.09
16:59 26/04/24
FTSE All-Share
4,423.59
17:14 26/04/24
Oil Equipment, Services & Distribution
4,928.34
16:30 11/04/24
The announcement saw shares in the oil and energy engineering services group hit fresh 52-week lows.
In a pre-close trading update for the six months to 30 June, Aberdeen-based Wood Group also reported a decline in operations and maintenance work in the eastern hemisphere.
"The first half is materially down on H1 2016, principally due to a significant reduction in projects and modifications work, particularly in the North Sea. Operations and Maintenance is also down but is less impacted," the company said in a statement.
That was mainly the result of less brownfield work in the North Sea but general engineering services work in Saudi Arabia was also slower than had been envisioned, which had led the company to reduce its headcount in the region.
Activity in the subsea segment of its Specialist Technical Solutions arm was also seen down on the same period of 2016, although it had seen "modest improvement".
On a more positive note, Wood Group was anticipating a stronger backhalf of the year.
Indeed, even for the first six months of 2017 the outfit eported an improved performance in offshore greenfield activity in the western hemisphere, alongside "relatively robust" activity in operations and maintenance work.
As of 0954 BST shares of Wood Group were down by 3.03% to 640.50p.