Wood Group shares jump despite fall in half-year profit
Shares in oil services company Wood Group jumped more than nine per cent today as the market cheered its cost cutting and positive full-year projections.
Wood Group said profit in the six months to 30 June fell 20.6 per cent as the coronavirus-driven oil price crash hit its global energy clients.
Adjusted earnings fell 20.6 per cent to $305m (£231m), but remained within the upper end of the company’s forecast.
The company also said it was suspending its dividend to preserve cash.
Wood Group said its revenue for the period fell 14.7 per cent to $4.08bn.
The oil field engineering business said it had cut net debt excluding leases by nearly a third from $1.7bn to $1.2bn.
The company’s order book at June end fell 16.4 per cent to $7bn.
Chief executive Robin Watson said: “In the first half of 2020, we took early and decisive actions in response to the unprecedented impact of Covid-19 on the global economy and oil price volatility.
“Focusing first on the safety of our people, we took action to reduce cost, protect margins & cashflow and ensure balance sheet strength, while delivering for customers. We are benefitting from our broader market exposure and have seen relative resilience in two thirds of our revenue which is derived from chemicals & downstream, renewables and built environment markets.
“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.”
Wood Group shares rose 9.3 per cent to 232p this morning.