Wood finds choppy waters in North Sea

WOOD GROUP has posted a slump in half year profits after flagging challenging conditions in the North Sea.

The company, which is in the process of acquiring Amec Foster Wheeler, reported a 77 per cent fall in pre-tax profit to 13.5 million US dollars (£10.5m) in the six months to June 30, while revenue fell 10 per cent to 1.9 billion US dollars (£1.4bn).

Chief executive Robin Watson said: “First half performance was down on 2016 reflecting the different market conditions across our business. Robust performance in ALCS West and growth in STS was offset by a weaker performance in ALCS East where the North Sea market is particularly challenging.”

Wood Group also booked 47.6 million US dollars of exceptional costs, more than half of which was linked to its proposed £2.2bn takeover of Amec. However, the Scottish firm’s full year outlook is unchanged and it anticipates a stronger second half.

Earlier this month the Amec deal received a boost after the Competition and Markets Authority (CMA) said proposals put forward by the firms could help allay antitrust concerns, meaning it will avoid a full-blown probe.

Mr Watson added: “In June shareholders overwhelmingly approved our offer for Amec Foster Wheeler which will accelerate our strategy to create a global leader in project, engineering and technical services across a broad range of industrial sectors, the largest of which will be oil and gas.”