However, in a trading update, the Aberdeen-based firm said it saw signs of “modest recovery” in some markets, and expects its 2016 results to meet City forecasts, which currently point towards underlying earnings of about $370 million (£292m).
Wood Group, led by chief executive Robin Watson, saw its profits slide more than 26 per cent to $166.4m during the first six months of the year, but today insisted that its balance sheet remains strong and it remains on course to deliver a double-digit increase in its annual dividend.
It said: “Oil and gas markets remain challenging in 2016. Lower oil prices have endured and activity has fallen across the sector. In response, we have significantly reduced our cost base, worked alongside customers to improve efficiency and refined our operating structure to enhance customer delivery.
“Looking ahead, the market continues to present significant challenges and although these are likely to persist during 2017, in selected markets we do see indications of modest recovery. We are confident that our focus on delivering value through our asset life cycle and specialist technical solutions, together with our customer relationships, global footprint and strong financial footing position us well.”
Wood Group, which has a presence in more than 50 countries, is due to report its full-year results on 21 February.