logo-loader

John Wood Group leaves full-year outlook unchanged

Published: 18:32 28 Jun 2018 AEST

Oil platform by night
The company is experiencing challenging conditions in the Gulf of Mexico

John Wood Group PLC (LON:WG.) said it continues to see early signs of recovery in its core oil & gas market.

The shares dipped 5.4p to 657.6p in early trading, however, as the oilfield services provider left its full-year outlook unchanged.

READ: Wood Group shares rise as it highlights good trading momentum in the first quarter

The group said it expected to deliver first-half revenue of around US$5.1bn or US$5.2bn, up from US$2.28bn a year earlier, reflecting the addition of Amec Foster Wheeler to the group.

Half-year underlying earnings (Ebita) were tipped to check in at somewhere between US$250mln and US$260mln.

The group said it expected performance in the second half to be stronger as it usually is, although the effect may be more pronounced this year as the synergies from the Amec takeover kick in.

The group said the integration of Amec remains ahead of schedule.

It said it had delivered around US$20mln of cost synergies in the first half of 2018 against an expected total of more than US$50mln for the full year.

READ: JP Morgan turns bullish on Wood Group as it praises Amec Foster Wheeler acquisition

“We anticipate an exit run rate of >$80mln by the end of the first year post completion, with the majority of cost synergies being recognised in the Asset Solutions business units. In line with previous guidance, costs to deliver are expected to be c$65mln with c$40mln recognised in exceptional costs and c$25mln in capital spend. Around half of the $65mln will be recognised in H1,” the group said.

Net debt at the end of June is anticipated to be roughly US$1.7bn, which reflects improved operational cash generation.

Wood Group said it expects to announce more asset disposals in the second half of the year.

“We are continuing to see early signs of recovery in our core oil & gas market and good contract awards in broader industrial sectors. We remain on track to deliver growth in 2018,” said Robin Watson, the chief executive officer.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

3 hours, 50 minutes ago