John Wood Group PLC (LON:WG.) saw its shares drop this morning after has it said it is more cautious on the full-year outlook with its first half performance down on 2016 and weaker than anticipated, although the oilfield services group anticipates a stronger second half.
In early morning trade, Wood Group shares were 3%, or 20.0p lower at 640.5p.
In a trading update for the six months to June 30, the FTSE-listed firm – which saw its shareholders last week approve the group’s £2.22bn takeover of Amec Foster Wheeler PLC (LON:AMFW) – said the first half had seen “continued challenges in our core oil & gas market with modest recovery only in certain areas.”
READ: Wood Group launches around £2.225bn recommended all-share offer for troubled Amec Foster Wheeler
The company added: “Robust activity in the West including improved performance in offshore greenfield project engineering and commissioning is being more than offset by weaker activity in the East, where we have seen a further reduction in projects & modifications work, particularly in the North Sea.”
Wood Group said: “The impact of the tougher pricing environment in 2016, partially offset by the enduring benefit of structural cost reductions achieved in the last two years, will result in a reduction in first half margin as expected.”
Wins multi-million dollar contract from Husky Energy
In a separate statement, the firm also announced that it has been awarded a multi-million dollar contract by Husky Energy to complete detailed engineering for the topsides of White Rose, a concrete gravity-based structure wellhead platform planned for offshore eastern Canada.
Robin Watson, Wood Group’s chief executive said, “We are combining our global expertise and capabilities from St. John’s, Canada; Houston; Sandefjord, Norway; and Bogotá, Colombia to complete White Rose in the next 12 months with a clear focus on adding value and delivering cost savings and efficient project delivery.”
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