UK: Wood Group Issues Q1 Pre-Close Trading Update

John Wood Group PLC (”Wood Group”) issues the following pre-close trading update for the six months to 30 June 2012. Results for the first half will be released on 21 August 2012.

The Group has delivered good growth in the year to date and remains confident of achieving full year performance in line with expectations.

Their Engineering division continues to perform well, delivering revenue growth and margin improvement which is expected to result in full year EBITA up around 30% on 2011. In upstream, They are seeing high activity levels supported by a good order book and future prospects. They are working around the world for clients on a broad range of projects, including the Inpex Ichthys project in Australia for Samsung and Chevron’s Mafumeira Sul project in Angola for Daewoo Shipping and Marine Engineering. In subsea and pipelines, the strong overall performance continues, driven in particular by the UK and Australia. Earlier this year Wood Group secured an Enterprise Frame Agreement with Shell, under which they are executing a range of work including the Linnorm FEED study in Norway. In downstream, process and industrial, performance continues to be impacted by lower expenditure in the refining market in North America.

Wood Group PSN continues to expect improved performance over 2011. In the UK, they are seeing good activity levels on long term operations & maintenance contracts, including those with BP, Shell, Talisman and TAQA. The Americas remain strong, particularly in the provision of production support services in the US shale regions where theysee opportunities for further growth. In International markets, losses are continuing on significant long term contract in Oman. Elsewhere, they remain active in Australia, Africa and the Caspian.

Wood Group GTS expects good growth in EBITA for the year, weighted to the second half. In Maintenance, power markets continue to be relatively challenging although they are seeing some early indications of improving conditions in the US. In Power Solutions, there has been some delay in anticipated completion on GWF contract although they continue to schedule completion in the second half of 2012. The Dorad contract remains on track and scheduled for completion in 2013. They continue to pursue additional Power Solutions prospects in Africa, the Caspian and the Middle East.

Their balance sheet remains strong and provides a robust platform for growth.

The Group has delivered good growth in the year to date and remains confident of achieving full year performance in line with expectations.

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Subsea World News Staff , June 29, 2012; Image: woodgroup