Wood Group to book non-cash credit from US tax changes

The company said the cash impact of the cut in the headline US federal rate to 21% was likely to be offset by greater restriction on the level of interest deduction allowed in the US also introduced by the legislation.

“The US rate reduction is expected to have a favourable impact on Wood’s effective tax rate going forward,” Wood said in a statement.

It added that the outcome of the purchase price allocation exercise relating to its takeover of Amec Foster Wheeler (AFW) would impact Wood’s effective tax rate, but said it would provide quantitative guidance with full year results next month.

“Recognising the risks inherent in our short term forecasting immediately following the acquisition of AFW in October, in the December trading update we conservatively estimated that net debt at the year end would be around $1.8bn. Actual net debt at 31 December was $1.65bn,” Wood said.