Headlines

  • Total revenue down 17% and Total EBITA down 26% as challenging conditions prevailed in the oil and gas sector. Pricing pressure partly offset by management of utilisation and additional overhead cost savings of c.$50m in the first half. 2015 EBITA benefitted from the release of deferred consideration on acquisitions
  • Focus on ongoing reorganisation to enhance customer delivery
  • Delayering and back office rationalisation to maximise efficiency
  • Prioritisation of utilisation across all levels; group headcount down 10% in 1H16
  • Cost efficiency and reorganisation initiatives reflected in exceptional cost of $30m net of tax
  • Engineering – Total revenue down 23% and EBITA down 21%. Subdued market in subsea and lower activity in downstream and process plants business. Margin benefitted from legacy engineering projects and the continued focus on utilisation and drive for efficiency
  • PSN Production Services – Total revenue down 15% and EBITA down 33%. Continued pressure on volumes, scope and pricing in the North Sea and US onshore in the Americas. Underlying trading margin down c0.8% as cost reductions and efficiencies partly offset the continued pricing pressure from customers
  • Strong balance sheet. Net debt, including JVs of $351.4m. Net debt: rolling EBITDA ratio of 0.7x
  • Interim dividend of 10.8 cents up 10%. In line with intention to increase the dividend per share by a double digit percentage for 2016
  • Unchanged outlook for full year 2016; anticipate full year EBITA down around 20% on 2015, in line with previous guidance

‘Performance in the first half of 2016 reflects the balance of a challenging oil and gas market, our continued focus on utilisation and cost management and the benefits of our flexible, asset light model. Our overall outlook for 2016 remains unchanged; with full year EBITA anticipated to be around 20% lower than 2015, in line with previous guidance.

Looking further ahead, we see early indications of modest recovery in some areas and believe our customer relationships, geographic footprint, strong financial footing and relentless focus on delivering value through our asset life cycle services and specialist technical solutions, position us well’ – Robin Watson, Chief Executive



Article Tags

Wood Group
United Kingdom
West Europe

Finance
North Sea

Subsea


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