The engineering firm expects a better showing in the second half of its financial year (Andrew Milligan/PA)
(Picture: PA Archive)Oilfield and energy services firm John Wood Group has not shown much sign of a spending bonanza in the industry at a time of high commodities prices, reporting a decline in revenue and profit for the first half of its financial year.
Operating profit at the Aberdeen-based engineer fell almost 9% to $41 million before exceptional items, from revenue of $2.6 billion, which slipped 0.4%. Its order book rose almost 5% to $6.4 billion
“The strong order book gives me confidence for the future but there is a lot more to do on cash generation and this is our top priority,” said Ken Gilmartin, chief executive, who took over in the top job in July.
Shares in the company fell 11 per cent to 131p in early trade in London.
Wood Group operates in over 60 countries and employs 40,000 people and is in the process of selling its Environment Consulting business to WSP Global of the US, from which it expects net cash proceeds of $1.62 billion with the deal due to close in the third quarter.
It said it would issue an update on a new strategy for the business in November, adding “there are some areas we need to improve upon and at pace,” with “insufficient discipline in project selection, leading to inconsistent financial outcomes” which contributed to “a lack of cash generation”.
Wood Group expects its second-half performance would improve, helped by its turbines joint ventures which faced “supply chain challenges” in the first half, while demand for its energy transition services, including consultancy on carbon capture and decarbonising industrial sites, was increasing.
