Wood Group hikes dividend, sees profit fall

Wood Group, a multinational oil and gas services company headquartered in Aberdeen, has seen a significant drop in profit in 2015 when compared to the one made in 2014, and has proposed a dividend increase. 

In its full year 2015 results report on Tuesday, Wood Group reported a profit of $90.1 million in 2015, as opposed to $336.3 million in 2014.

The company’s total revenues plunged 23.2% from $7.6 billion in 2014 to $5.9 billion in 2015. Total revenue includes the contribution from joint ventures and, in 2014, activities classified as discontinued.

Robin Watson, Chief Executive, said: “Our continued actions to reduce costs, improve efficiency and broaden our service offering through organic initiatives and strategic acquisitions, position us as a strong and balanced business in both the current environment and for when market conditions recover.” 

Wood Group’s Board has recommended a final dividend of 20.5 cents per share, which makes a total distribution for the year of 30.3 cents, an increase of 10% in line with previously stated intentions. The dividend cover ratio was 2.8 times (2015: 3.6 times).

“There is no change to our dividend approach, and our intention is to increase the dividend per share for 2016 by a double digit percentage,” the company stated in the report.

Wood Group’s underlying headcount is down by over 8,000 people or 20% compared to December 2014. The company delivered overhead cost savings of $148 million which will sustain into 2016.

Regarding the company’s outlook for 2016, Watson said: “The challenging market conditions in the second half of 2015 have continued in the first quarter of 2016. Further spending reductions by customers will require continued focus on the controllable elements of our business. Our continued actions to reduce costs, improve efficiency and broaden our service offering through organic initiatives and strategic acquisitions, position us as a strong and balanced business in the current environment and when market conditions recover.”

Offshore Energy Today Staff

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