Wood Group operating profit falls as revenue dips

Wood Group posted a decline in first-half operating profit on Tuesday as revenue dipped.

In the six months to 30 June, operating profit before exceptional items fell 8.9% to $41m, with revenue down 0.4% to $2.6bn. The consulting division saw revenues rise 2% thanks to increased demand for the company’s energy solutions, while the operations segment saw revenues grow 18%, supported by an improved market for oil and gas.

However, as expected, revenue in the projects arm fell 15% as Wood Group continues to see the impact from its move away from large-scale projects and as customer investment has yet to fully pick up. "We expect to grow revenue in the second half, with a return to growth expected in Projects," it said.

Wood Group reiterated its FY22 guidance for revenue of between $5.2bn and $5.5bn and adjusted earnings before interest, tax, depreciation and amortisation of $370m to $400m.

Chief executive officer Ken Gilmartin said: "Since becoming CEO in July, I have been really encouraged to see the improving operational momentum across our business, including some great client wins. The strong order book gives me confidence for the future but there is a lot more to do on cash generation and this is our top priority.

"We are developing an updated strategy for Wood that will draw on our core strengths, return us to growth and deliver sustainable free cash flow. We perform complex work in critical industries and our outstanding technical expertise and strong long-term client relationships position us well for growth across targeted markets."