Wood Group ‘cautious’ for months ahead

Energy services giant Wood Group is adopting a “more cautious” outlook for the remainder of the year after seeing a weaker-than-expected performance during the first half.

The Aberdeen-based group, which earlier this month had its £2.2 billion takeover of rival engineer Amec Foster Wheeler approved by shareholders, said it had seen only a “modest” recovery in some areas of its core oil and gas market.

“Robust activity in the west including improved performance in offshore greenfield project engineering and commissioning is being more than offset by weaker activity in the east, where we have seen a further reduction in projects and modifications work, particularly in the North Sea,” Wood said in a trading update yesterday.

“The impact of the tougher pricing environment in 2016, partially offset by the enduring benefit of structural cost reductions achieved in the last two years, will result in a reduction in first-half margin as expected.”

Following shareholder approval on 15 June, Wood expects to complete its purchase of Amec in the fourth quarter, subject to clearance from competition regulators.

Addressing current trading, the group, which is led by chief executive Robin Watson, added: “First-half performance is down on 2016 and weaker than anticipated. We are more cautious on the full-year outlook but anticipate a stronger second half.”

The firm also announced a multi-million-dollar contract with Husky Energy in eastern Canada. 0 The energy services firm is led by CEO Robin Watson