Wood Group poised for boost from oil and gas recovery

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Aberdeen-headquartered energy services group Wood is expected to report continued signs of recovery in its core oil and gas market when it reports interim results on Tuesday.

The group is forecast to deliver first-half revenues of $5.1 billion (£4bn) to $5.2bn and underlying earnings of between $250 million to $260m. It will also provide an update on progress with the $50m cost synergies it expects to achieve this year from the integration of the Amec Foster Wheeler (AFW) business.

It comes after an upbeat first-quarter trading update in May, when Wood said it was confident of returning to growth during 2018 as a whole, helped by increased investment by customers on capital projects.

Chief executive Robin Watson said at the time: “The first quarter has demonstrated the significant benefits of the operational platform we have created. Our integration programme is ahead of schedule and we are seeing good momentum in trading, cost and revenue synergy delivery.”

And he said the firm expects to deliver revenue and earnings growth as well as a benefit from cost synergies related to its merger with Amec of more than $50m this year, with Wood also forecasting that about 60 per cent of its annual earnings will fall in the second half of 2018.

The group swung to a pre-tax loss of $30m in 2017, compared to a profit of $34.4m 12 months previously, due in part to costs related to its AFW acquisition, which completed in October.

Wood said last week that it is disposing of its 50 per cent interest in the Voreas wind farm joint venture in Italy.