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Wood makes £160m cost savings, increases renewables work during Covid-19 crisis

Wood
Robin Watson, chief executive of Wood plc.

Aberdeen-headquartered energy services firm Wood has announced multi-million pound cost savings and an increased renewable energy contracts since the start of 2020.

The company said today it has taken action despite the challenges created by the Covid-19 pandemic to deliver overhead reductions by more than £160 million.

It has also increased global renewable energy contracts by 4% – now 25% of Wood’s overall business.

However, upstream and midstream oil and gas activity is down 5%.

Wood also secured more than £1 billion overall in new orders in April and May.

Robin Watson, Wood chief executive, said:“The global engineering and consultancy market is facing unique and unparalleled challenges in 2020 from Covid-19 and volatility in oil prices.

“The safety of our people, clients and suppliers remains our top priority through this period. Despite the disruption, we are continuing to successfully win and execute work, supported by our strategy of broadening the business across the global energy market & the built environment.

“The relative strength we are seeing in chemicals & downstream, the built environment and renewables, where we will double our revenues in 2020, is helping to mitigate the impact of challenging conditions in upstream and midstream oil and gas.”

Wood claimed it has also managed to ensure that 40,000 staff can successfully work remotely and site- based employees have been able to work safely on site.

However, Wood confirmed in April it was making 66 workers redundant within its Asset Solutions business.

Job were impacted across Wood’s UK offices in Aberdeen, Glasgow, Darlington and Ellesmere Port in Cheshire.

Wood has operations in 60 countries, employing a workforce of around 60,000 people.

David Barclay, head of office at Brewin Dolphin Aberdeen, said: “Wood has remained relatively resilient against a very challenging backdrop – the effects of Covid-19 on the oil and gas market has underlined the importance of the business’s decision to diversify its offering.

“First half revenues are expected to decline around 11%, but it has good visibility over future revenues and even won new orders at the height of the crisis in the UK, during April and May.

“Debt remains a key focus and it is reassuring to see Wood expects to reduce this by the end of the year, helped by disposals and cost reductions.

“Nevertheless, Wood’s fortunes are still largely tied to the direction of the oil price, and there is likely to be more volatility ahead.”

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