Wood Group posts first half operating results
Wood Group on July 7 reported a $95mn six-month operating profit for January-June, up from $86mn yr/yr, though it wrote off $30mn of that amount on restructuring costs, business closures and the disposal of its built environment consulting division.
Canada's WSP Global has acquired the built environment unit in a $1.9bn deal, anticipated to "restore financial flexibility" and help Wood Group deliver its forward-looking strategy.
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Stronger contract activity created by surging energy prices and attractive market fundamentals, particularly across Europe and the Middle East, resulted in an annual 17% revenue lift at Wood Group's operations division, which generated around $1.2bn from January-June.
However revenue from Wood Group projects declined by around 15% on the year to $1bn, reflecting a "subdued" market for large investments and a strategic shift away from "large scale fixed price work". Project income is expected to rebound in the second half of the year on the back of Wood Group's $2bn order book as of May 31, up 10% from December 2021 and 30% on the year.
Wood Group says the increased order backlog was underpinned mainly by conventional energy and chemicals projects, particularly in the engineering design and EPCM contract areas.
Big contract awards during the half included a 10-year engineering and project support deal with Chevron. The US major will use Wood Group resources to support various offshore and onshore projects, across the upstream, midstream and downstream sectors.
Solvay awarded Wood Group a two-year EPCM contract for a polymer manufacturing site in France, while Esseco signed a five-year deal for EPC services including site upgrades and modifications.