Wood Group forecasts revenue slump as Covid derails operations
Engineer Wood Group this morning forecast a 21 per cent drop in half year revenue as the company received smaller contracts during the pandemic.
Revenue hit $3.2bn in the six months ended 30 June, with improved momentum in the second quarter as lockdown restrictions eased.
The company said it expects net debt to increase to around $1.15bn, reflecting an unwind of advance payments during the first half.
The FTSE 250 firm, which provides services for the oil industry, was battered by the collapse in oil prices last spring.
As a result, it swung from a profit of £73m in 2019 to a hefty loss in the last financial year.
Following the half year update, shares in Wood Group dipped 3.5 per cent as markets opened.
Outlook
Looking forward, Wood Group expects the remainder of the year to see a further acceleration in trading and growth in its order book, which is up six per cent so far in 2021.
“Following a steady start in Q1, we have seen improving momentum in activity in Q2 with growth in consulting and operations compared to Q2 2020,” said Robin Watson, chief executive of Wood Group.
“This gives us confidence that the group will return to growth in the second half, compared to both H1 2021 and H2 2020.”
Stuart Lamont, investment manager at Brewin Dolphin, said: “It has been a relatively slow start to the year for Wood, with revenues down around one-fifth on the same period in 2020.
“Nevertheless, the management team appears to remain confident in the outlook and order book momentum at its operations and consulting divisions looks positive, suggesting the company can get back on track in the second half of the year.”