Wood Group Releases Half Year Financial Results

Wood Group, an international energy services company with over $7bn sales, released its half year results for the six months ended 30 June 2014. The Group has two reporting segments – Wood Group Engineering and Wood Group PSN – providing a range of engineering, production support and turbine services to the oil & gas, and power sectors.

Financial Summary

• Total revenue1 of $3,801.2m up 10% and Total EBITA in line with H1 2013 at $243.9m,
• Continue to anticipate full year Total EBITA to be in line with expectations and up on 2013,
• Revenue from continuing operations on an equity accounting basis up 16% at $3,224.4m (2013: $2,788.7m),
• Profit from continuing operations on an equity accounting basis before tax and exceptional items up 15% at $182.4m (2013: $159.0m),
• Adjusted diluted EPS of 44.4 cents (2013: 44.5 cents),
• Interim dividend of 8.9 cents (2013: 7.1 cents) up 25%.

Segmental Highlights

Wood Group Engineering

• EBITA down 9%, reflecting a lower contribution from Upstream partially offset by good performance in Subsea & Pipelines and Downstream,
• Increased engagement in early stage work; remain well positioned to influence and reduce overall project costs,
• Acquisition of Agility Projects for NOK 1,008m (c.$164m) in July 2014 positions us well in key Norwegian market.

Group PSN
Production Services

• Strong EBITA growth of 47% driven by performance in US shale, including Elkhorn acquired in 2013,
• Robust North Sea business benefitting from contract renewals and growth in Pyeroy acquired in 2013,
• International position reinforced with recent multi-year award in Malaysia adding to work commenced in Papua New Guinea.

Turbine Activities

• Breakeven at the EBITA level reflecting performance in Turbine JVs together with losses on the Dorad contract in the period,
• EthosEnergy JV with Siemens completed in May,
• Significant improvement expected in H2, including loss on Dorad to be largely recovered.

 Bob Keiller, CEO commented:

“We have seen strong performance in our PSN Production Services activities in the US shale market, offset by an anticipated lower contribution from Upstream Engineering and weaker than expected performance in our Turbine Activities. Overall, the outlook for the Group for the year remains unchanged from the position outlined at our December 2013 trading update; we continue to anticipate full year EBITA to be in line with expectations and up on 2013, led by growth in PSN Production Services.”

Press Release, August 19, 2014