Wood Group sees FY ahead of expectations as H1 profit rises

22nd Aug 2023 07:02

(Sharecast News) - Engineering and consultancy company Wood Group on lifted annual earnings guidance after winning major contracts as it posted better-than-expected adjusted interim earnings, driven by a strong order book.

Revenue rose 16% to $3bn for the six months to June 30 with adjusted core earnings up 8.5% to $202m. Sales in its projects division jumped 29.6% to $1.25bn, thanks to robust demand from the chemicals, and oil and gas sectors.

The group's overall headline order book increased 5% from the end of December to about $6bn. Recently won major contracts included an estimated $250m two-year extended deal to provide services to Brunei Shell Petroleum.

Looking forward, Wood said adjusted core earnings margin was expected to be flat in the nearer term at around 7%, partly reflecting investments being made in the business and the level of low margin pass-through revenue activity.

"As such, adjusted EBITDA for full-year 2023 is expected to be ahead of our previous expectations and within our medium-term target of mid to high single digit growth," the company said.

It added that chief financial officer David Kemp had decided to retire, but would remain in his role until a successful candidate is in place.

Reporting by Frank Prenesti for Sharecast.com