Upstream engineering is Wood's driving force

WOOD Group yesterday claimed its upstream engineering activities will continue to drive profit growth this year, with strong demand from the United States.

In a pre-close trading update for the six months to the end of June, the Aberdeen-based oil and gas services firm said it had delivered "good growth" in the year to date and predicted full-year results would be in line with previous expectations.

It said its subsea and pipeline engineering work continues to perform "strongly", whereas its downstream, process and industrial markets remain "soft".

The company said: "In the US, we are seeing strong demand for our onshore services, driven by activity in the shale regions, and steady performance offshore in the Gulf of Mexico." Work in the North Sea was described as "reasonable" but the firm said some Australian contracts had been delayed, as had its work in Oman.

Wood Group added that there was an improving outlook for its gas turbine services for the power market.

It said: "We continue to anticipate a strong recovery in gas turbine services (profits] for the year, which will have a significant second half weighting."

Keith Morris, analyst at Evolution Securities, said: "While the company expects full-year results to be in line with expectations, the areas of softness reported last month remain."

Evolution maintained its "add" rating on Wood Group and left its 700p target for the stock unchanged.