Wood Back In Black, Sells Nuclear Ops

UK-based services provider Wood managed a return to profit in the first half of the year, despite a slump in revenues, according to company results published on August 20. The Aberdeen-headquartered firm also announced the sale of its nuclear energy operations – a move aimed at reducing its debt.

Profits stood at $13mn for January to June, marking a reversal from a $52mn loss in the same period last year, when Wood took on $125mn in amortisation charges and $101mn in exceptional costs.

Operating profit also saw solid growth, rising 28% yr/yr to $160mn, despite revenues dipping 2.6% to $4.79bn. Adjusted Ebitda rose from $293mn to $384mn, with its margin climbing from 6% to 8%. 

 “Strong margin improvement and profit growth in the first half was led by activities in energy markets in the eastern hemisphere and our environment and infrastructure operations in North America, together with cost synergies,” Wood CEO Robin Watson commented. “With 87% of 2019 revenues delivered or secured we remain confident in our full year outlook and guidance is unchanged.”

He concluded that the group was “well positioned for growth.”

Wood’s order book totalled $9.2bn as of June 30, up from $9.1bn six months earlier.

The company also revealed on August 20 it had agreed to sell its nuclear business for $305mn to US-based Jacobs Engineering. The business designs, delivers and maintains strategic and complex nuclear assets, primarily in the UK, earning $14.2mn in pre-tax profit last year.

“The sale of our nuclear business follows other recent divestments and marks a significant step towards achieving Wood’s target leverage policy,” Wood CFO David Kemp explained.

The deal should close before the end of March 2020, pending regulatory clearance. This will help Wood cut its leverage to 1.5 times net earnings as planned by the first quarter of next year.