Wood Group UK posts higher first-half profits on improved pricing

Wood Group, a British oilfield engineering and services company, posted an 8.5% increase in its core earnings for the first half of this year. This was aided by better pricing. The firm also maintained its earnings forecasts for 2019 and 2025.

Why it's important

Wood Group, under pressure from an activist shareholder to sell or rethink their UK listing in order to maximize shareholder return, had taken initiatives to improve costs and pricing and to focus more on sustainable business in relation to decarbonisation, net-zero and sustainability.

CONTEXT

The results are coming days after Dubai's Sidara withdrew from an offer to buy Wood Group, citing increased geopolitical risk and financial market uncertainty.

By the Numbers

Wood Group reported a core profit of $219m for the six-month period ending June 30, compared to $202m a year earlier.

The company reiterated that it expects a high-single-digit growth rate in core earnings in this year's fiscal year and is sticking to its forecast for adjusted core profit growth to exceed its medium-term target in 2025.

According to a consensus compiled by companies, analysts on average predicted that adjusted core earnings in 2024 would be around $463 million. The following year they forecasted $540 million.

KEY QUOTES

In a recent statement, CEO Ken Gilmartin stated that he was confident in the future of our strategy, our actions, and our growth potential for all our markets.

(source: Reuters)