Wood Group earnings drop amid weak oil prices

Oil services firm Wood Group reported a drop in earnings for 2015 amid significantly reduced customer activity, as weak oil prices took their toll.

For the year ended 31 December, earnings before interest, taxes and amortisation fell 14.5% to $469.7m (£333m), which was in line with the company’s guidance.

Total revenue, meanwhile, fell to $5.85bn from $7.62bn.

The company said conditions in oil and gas markets became increasingly challenging in 2015, with oil prices down by around a further 30% and exploration and production capital expenditure down around 20%.

It said the expectation of a lower-for-longer commodity price environment has led many global E&P customers to reassess capex and opex spending plans, with industry commentators anticipating further spending reductions in 2016.

Wood Group said it has cut its underlying headcount by more than 8,000 people – or 20% since the end of 2014.

Still, the firm said it was seeing more resilient demand for its services in other markets and declared a total dividend for the year of 30.3 cents a share, which is a 10% increase from the previous year.

The company also said it intends to raise the dividend for 2016 by a double-digit percentage.

Chief executive Robin Watson said: “Our continued actions to reduce costs, improve efficiency and broaden our service offering through organic initiatives and strategic acquisitions, position us as a strong and balanced business in both the current environment and for when market conditions recover.”