Wood Group swings to H1 operating loss but FY guidance maintained

In the six months to the end of June, Wood Group swung to a statutory operating loss of $899m from a profit of $23m in the same period a year earlier, with revenue down 4.8% to $2.8bn.

Pre-tax losses widened to $961.7m from $26m a year earlier. The company pointed to an impairment charge of $815m against goodwill and $6m of costs related to Sidara's takeover proposals in the period.

Earlier this month, Wood Group shares tanked after Dubai-based engineering and consultancy firm Sidara said it wouldn’t be making a firm takeover offer for the company due to "geopolitical risks and financial market uncertainty".

Wood Group had said at the end of May that it was evaluating a fourth and final "unsolicited, preliminary and conditional" takeover proposal from Sidara at 230p a share.

Chief executive Ken Gilmartin said: "These results demonstrate continued progress on our turnaround. Our strategy continues to deliver higher EBITDA and a larger order book, and we are improving the quality of our business with better pricing and higher margins.

"Our Simplification programme is progressing at pace, with nearly half of the annualised $60 million savings from next year already secured. I am also pleased that we have achieved all of this while recording our highest level of employee satisfaction ever, putting Wood in the top quartile of all our peers and demonstrating that our team is focused and energised on driving Wood to its full potential.

"As we look ahead, we remain confident that our strategy, actions we are taking and growth potential across our markets will deliver significant value for our shareholders. We are pleased to reconfirm our outlook today, both for 2024 and 2025, including generating significant free cash flow in 2025."