Wood Group profits more than halved amid Covid-19 crisis

Half-year profits at engineering firm Wood Group more than halved as it scrapped the dividend on the back of oil prices battered by the Covid-19 pandemic.

The Aberdeen-based company reported operating profits of $66m, down from $139m a year ago. Revenue for the six months to June 30 fell 14.7% to $4bn.

Wood's order book stood was 16.4% lower at $7bn on a like for like basis, with $3.1bn due to be delivered in the second half, while net debt excluding leases was cut to $1.22bn at June 30 from $1.77bn a year ago and $1.42bn at the end of 2019, benefiting from disposal proceeds and steps taken to protect cashflow.

The company said the impact of the coronavirus had been offset by “relative resilience” in its downstream & chemicals, renewables and built environment markets, which now more than two-thirds of revenue.

No interim dividend was declared as the company cited continuing uncertainty over oil prices.

"We have successfully protected margins, and delivered trading performance at the upper end of guidance while reducing net debt as a result of portfolio optimisation and steps taken to protect cashflow. Our objectives are to maintain full year margins in line with 2019 and deliver strong cashflow to further reduce debt in the second half," said chief executive Robin Watson said.