Wood Group sticks to outlook despite tough oil market

Bob Keiller will retire as Wood Group chief at the end of this month

ENERGY services giant Wood Group proclaimed its confidence yesterday of meeting its profit targets in the face of “challenging” market conditions.

The Aberdeen-based group forecasted underlying earnings of about $465 million (£306m) for 2015 – down from $549.6m profit in 2014.

“In what is expected to be a prolonged period of challenging market conditions, we are benefiting from our flexible business model and are focused on managing utilisation, delivering overhead cost savings in excess of estimates at the half year and working with customers to develop efficient solutions,” Wood Group told investors in a trading update.

It said its balance sheet remained strong, providing firepower for “strategic acquisitions and our previously stated intention to increase the dividend by a double digit percentage in 2015”.

The company’s continued focus on acquisition opportunities follows last week’s $150m purchase of Texas-based Infinity, a family-owned industrial construction and maintenance contractor serving the petrochemical, refining and gas processing sectors.

That deal is expected to complete by the end of this month, when Wood Group chief executive Bob Keiller is set to retire. Keiller will be succeeded by Robin Watson, currently the firm’s chief operating officer.

In Upstream, work continues on key projects including Det Norske’s Ivar Aasen and Hess Stampede and these will both provide follow on work in 2016, the company said.

Activity on the Saudi Aramco Offshore Maintain Potential contract is also progressing well, Wood Group added.