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Wood Group sets aside $196m to settle bribery cases; Posts FY loss
16th Mar 2021 08:01
(Sharecast News) - Oil-sector services company Wood Group swung to a full-year loss, scrapped its dividend and increased provisions to settle bribery cases in the US, UK and Brazil.
The company on Tuesday reported losses for the year to December 31 of £228m, compared to a profit of £73m a year earlier, after the collapse in oil prices amid the coronavirus pandemic.
Revenue slumped 24% to £7.56bn while operating profit before exceptional items almost halved to £214m.
Wood said its order book at the end of the year was down around 17% reflecting "macro conditions and discerning bidder approach".
The company has been under investigation by Britain's Serious Fraud Office (SFO) over the link between Amec Foster Wheeler, which Wood acquired in 2017, and Unaoil, which has been the subject of a probe since 2016.
Wood had expected to pay $46m to settle the matters, but revised the figure upwards after an assessment of the likely cost of resolution with the relevant authorities.
It is also continuing to cooperate with the US Department of Justice and Securities and Exchange Commission in relation to Amec Foster Wheeler's link to Unaoil and other counterparties, in various regions.
An internal investigation confirmed that "a legacy Wood Group joint venture engaged with Unaoil and that the joint venture made payments to Unaoil under agency agreements".
It added that talks were now at an "advanced stage" and could reliably estimate" a figure of $196.7m for a resolution with the SFO, and the US, Brazilian and Scottish Authorities.
Wood expects phasing of the payments, with $70m payable in 2021, and the remainder following in instalments over 2022, 2023 and 2024.
"Looking ahead, we are pleased to be nearing resolution of the legacy investigations so that we will be able to draw a line under them," said chief executive Robin Watson.
The news comes after fellow energy services firm Petrofac was suspended this week from tendering for Adnoc contracts in the UAE due to its own links to Unaoil cases.
The company on Tuesday reported losses for the year to December 31 of £228m, compared to a profit of £73m a year earlier, after the collapse in oil prices amid the coronavirus pandemic.
Revenue slumped 24% to £7.56bn while operating profit before exceptional items almost halved to £214m.
Wood said its order book at the end of the year was down around 17% reflecting "macro conditions and discerning bidder approach".
The company has been under investigation by Britain's Serious Fraud Office (SFO) over the link between Amec Foster Wheeler, which Wood acquired in 2017, and Unaoil, which has been the subject of a probe since 2016.
Wood had expected to pay $46m to settle the matters, but revised the figure upwards after an assessment of the likely cost of resolution with the relevant authorities.
It is also continuing to cooperate with the US Department of Justice and Securities and Exchange Commission in relation to Amec Foster Wheeler's link to Unaoil and other counterparties, in various regions.
An internal investigation confirmed that "a legacy Wood Group joint venture engaged with Unaoil and that the joint venture made payments to Unaoil under agency agreements".
It added that talks were now at an "advanced stage" and could reliably estimate" a figure of $196.7m for a resolution with the SFO, and the US, Brazilian and Scottish Authorities.
Wood expects phasing of the payments, with $70m payable in 2021, and the remainder following in instalments over 2022, 2023 and 2024.
"Looking ahead, we are pleased to be nearing resolution of the legacy investigations so that we will be able to draw a line under them," said chief executive Robin Watson.
The news comes after fellow energy services firm Petrofac was suspended this week from tendering for Adnoc contracts in the UAE due to its own links to Unaoil cases.