Wood shrinks debt pile to £1.8bn, targets full year EBITA

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The newly formed Wood has shrunk its debt pile to £1.8billion in the wake of the Amec Foster Wheeler takeover, its pre-closing statement revealed today.

The service company expects its full year proforma Wood EBITA to be in the region of $590million to $610million.

Between $335million to $355million will come from the former Wood Group business.

Chief executive Robin Watson said: “We remain very confident of delivering cost synergies of over $170m by the end of the third year following completion.

“Since completion, a number of themes highlighted in the AFW half year results have been evident in our review of the business post close. In the second half we have seen a better than anticipated outcome on certain oil & gas projects, offset by delays and cost overruns on a small number of fixed price contracts in the legacy Transmission & Distribution and Environment & Infrastructure businesses.”

The disposal of the AFW UK upstream business has reduced net debt by $300million.

After transaction and synergy delivery costs, net debt at 31 December is expected to be around $1.8bn.

Mr Watson added: “There is no change to our preferred long term capital structure and reducing debt to below 1.5x EBITDA remains our preferred use of free cashflow.

“We retain our progressive dividend policy and increased the first half dividend by 3%. Former AFW holders will be entitled to the full year dividend.”