Amec FW returns to 1H profit. Upstream challenges persist
Amec Foster Wheeler, a provider of services to the global energy industry, returned to profit in the first half of the year.
The UK-based company on Thursday reported a net profit of 57 million pounds on a 2,3 billion pund revenue. This is compared to a loss of 429 million pounds a year ago and a revenue of 2.8 billion pounds.
For the oil & gas and chemicals segment, underlying revenue fell 18%, with Amec FW citing long-standing challenging conditions which persisted across key upstream markets. However, underlying trading profit rose by 17% to £83m compared to H1 2016 as the benefits of the leaner operating structure and an improved operating performance came through, the company said.
Downstream contributed more than 50% of OGC revenues, a position Amec FW expects to continue, supported by good growth from Middle East downstream projects.
Upstream capital projects, however, remain weak, except for the ongoing work for major hook up projects in the UK North Sea, Amec FW said.
“Our asset support businesses have performed well: in the North Sea we have continued to grow volumes, as we strengthen our offering in preparation for the hook up project cycle ending. We have also started to mobilize key staff for the 5 year offshore rejuvenation contract for Brunei Shell Petroleum,” Amec FW said.
The OGC order book fell 3% during the first half to £2.9bn. Key additions included the 5 year offshore rejuvenation contract for Brunei Shell Petroleum and a limited notice to proceed for the EPC of a methanol plant in Louisiana for Yuhuang Chemical. The company has today also announced a major long term contract for maintenance services at the Yara Pilbara ammonia facilities in Western Australia.
During H1, the company signed global master service agreements with BP for pre FEED and FEED upstream engineering services and a downstream enterprise framework with Shell.