Reaction: Aberdeen's Wood trading ahead of last year

Wood, the Aberdeen-headquartered energy and engineering services giant employing tens of thousands of workers globally, has flagged solid first-half trading.

Chief executive Robin Watson pointed to significant growth in operating profit. Picture: Contributed
Chief executive Robin Watson pointed to significant growth in operating profit. Picture: Contributed

The group, which operates in more than 60 countries, told investors that its first-half performance was ahead of last year, with "significant growth" in operating profit.

In a trading update, chief executive Robin Watson said the performance had been led by energy markets in the eastern hemisphere, the group's environment and infrastructure operations in North America, together with the delivery of "further cost synergies".

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"Our expectation of revenue growth, strong earnings growth and cash generation in 2019 is unchanged," he added.

David Barclay, head of office at Brewin Dolphin Aberdeen, said: "It’s been a tough first half of 2019 for Wood shareholders with its stock falling around 20 per cent in the year to date - particularly on the back of results earlier in the year.

"Yet, today’s update underlines the fact that the company remains in an encouraging position: performance is ahead of the same period last year, cash generation is strong, and debt - the main source of concern about Wood - is being cut in line with expectations.

"While some analysts may want to accelerate the pace of debt reduction, this is a steady update against a volatile backdrop for the company."

In March, Wood beat market expectations with its full-year results as it reaped the benefits of its takeover of rival Amec Foster Wheeler, but said that a slower-than-expected boost from recovering oil prices would hold back progress on cutting debts.

Operating profit before exceptional items rose by 68 per cent to $357 million (£280m). Losses for the period reduced to $7.6m from $30m after exceptional costs of $183m related to areas including redundancy and restructuring.

Revenue for the year surged to $11.03 billion thanks to the impact of the Amec deal.