Energy services firm Wood Group sees 25% H1 profit increase

UK-based energy services firm Wood Group Plc announced on Wednesday its operating profit for the first half of 2019 would be 25% higher than last year, citing earnings growth and improving margins.

The FTSE 250 firm said its improving performance in the first half of the year was down to strong energy related activity at its Asset Solutions Europe, Africa, Asia and Australia (ASEAAA) unit, which contributes around 35% to total revenue.

Wood Group’s outlook for the full year remains unchanged, despite the impact of disposals in the first half, which contributed US$20 million in earnings before interest, tax, depreciation and amortization (EBITDA).

The company said earnings growth will be driven by a rise in revenue of  around 5%, along with cost savings of approximately $60 million.

“Today’s update underlines the fact that the company remains in an encouraging position,” commented David Barclay, senior investment manager at Brewin Dolphin.

“Performance is ahead of the same period last year, cash generation is strong, and debt – the main source of concern about Wood – is being cut in line with expectations.”