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Wood expecting ‘significant growth’ thanks to activity both east and west

Wood chief executive Robin Watson
Wood chief executive Robin Watson

Aberdeen-headquartered energy services firm Wood has announced it is expecting “significant growth” thanks to increased work in the eastern hemisphere and North America.

The firm’s trading update for the first half of 2019 claims higher operating profit and earnings before interest, taxes, depreciation and amortisation (EBITDA)

Wood’s update states that operating profit is up by 25%, while EBITDA was shown to be up by around 7%.

Robin Watson, Wood’s chief executive, said it puts the firm ahead of where it was the previous year.

He added that the full year outlook for the firm is unchanged, despite “the impact of disposals” completed in the first half of the year which contributed EBITDA of more than £15 million in 2018.

Revenue growth in the region of 5% weighted to the second half, together with the benefit of cost synergies of around £47.3m, is expected to lead to growth in adjusted EBITDA.

The firm has experienced growth in North American downstream, chemical and shale activity in the Permian Basin and Niobrara.

It also saw increased operations solutions work in the Middle East, driven by Iraq and the Caspian and growth in Asia Pacific, from Papua New Guinea and Australia.

Mr Watson said: “We have delivered significant growth in operating profit together with EBITDA margin improvement.

“This has been led by our activities in energy markets in the eastern hemisphere and our environment and infrastructure operations in North America, together with the delivery of further cost synergies.

“Our expectation of revenue growth, strong earnings growth and cash generation in 2019 is unchanged.”

David Barclay, head of office at wealth management firm Brewin Dolphin Aberdeen, added: “It’s been a tough first half of 2019 for Wood shareholders with its stock falling around 20% in the year to date – particularly on the back of results earlier in the year.

“Yet, today’s update underlines the fact that the company remains in an encouraging position.”

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