Financial highlights
- Total revenue down 19.3% at $3,069.0m (2014: $3,801.2) and Total EBITA down 7.4% at $225.9m (2014: $243.9m) against a backdrop of reduced activity throughout the oil services sector
- Total EBITA margin of 7.4% (2014: 6.5%) benefitting from overhead costs savings of $40m.
- Unchanged outlook for 2015; anticipate full year EBITA in line with expectations
- Revenue from continuing operations on an equity accounting basis down 17.6% at $2,656.9m (2014: $3,224.4m)
- Profit from continuing operations on an equity accounting basis before tax and exceptional items down 14.3% at $156.3m (2014: $182.4m)
- Adjusted diluted EPS of 40.1 cents (2014: 44.4 cents), down 9.7%
- Interim dividend of 9.8 cents (2014: 8.9 cents) up 10.1%, in line with intention to increase the dividend per share by a double digit percentage from 2015 onwards
- Net debt, including JVs, of $277.2m (2014: $427.4m). Net debt: annualised EBITDA ratio of 0.5x, at lower end of targeted range
Operational highlights
- Continued focus on actions to offset the impact of lower activity and pricing pressure
- Working with customers to reduce project costs, increase operating efficiency and safely improve performance
- Strict focus on utilisation; Group headcount down 13% since December
- Overhead cost savings of $40m achieved in the first half, significantly ahead of initial estimates.
- Secured new long-term awards in the North Sea for Antin, Gabon for Shell in PSN and in Saudi Arabia and Mexico for Engineering.
- PSN Production Services - Revenue down 21.7% reflecting lower activity particularly in the Americas, where we saw strong growth in US shale in 2014, and the North Sea. EBITA margin slightly increased; cost reductions and reduced acquisition deferred consideration provisions helping to offset pricing pressure
- Engineering – Entered 2015 with reasonable backlog. Revenue down 10.9% however EBITA margin slightly up reflecting good activity and improved margins in onshore pipeline and downstream offsetting the impact of pricing pressure and the deferral and cancellation of projects in Upstream and Subsea. Benefitting from overhead cost reduction, focus on utilisation and the contribution from Agility acquisition
Bob Keiller, CEO of Wood Group plc, commented:
“Conditions in oil & gas markets remain very challenging. Performance in the first half demonstrates our commitment to cost discipline and the resilience and flexibility of Wood Group’s through cycle model. Our outlook for 2015 overall remains unchanged and we anticipate that full year performance will be in line with analyst consensus. With little prospect of short term improvement in market conditions, we will focus on remaining competitive and protecting our capability, working with clients to reduce their overall costs, increase efficiency and safely improve performance.”
