Wood Group (John) PLC posted a fall in interim profits but said it expects higher revenue across its business this year and an improved performance in the second half on the back of a strong order book.
The energy services company posted sales for the six months to 30 June 2022 unchanged at US$2.5bn, while underlying profit (adjusted EBITDA) dropped to US$185mln from US$195mln in the same period last year, as a robust performance in the Consulting business was offset by a decline in the Projects and Operations divisions.
The order book grew 5% to US$6.4bn billion against an improving backdrop in all end-markets, with the Consulting and Projects businesses seeing rises of 16% and 24% respectively. This strong growth was partially offset by a 6% decline in Operations.
At 30 June, revenue in the order book for the second half of 2022 was US$2.48bn, up 9% on a year earlier, underpinning the group’s expectations of revenue growth in the final six months.
Wood Group is forecasting revenue of US$5.2bn-US$5.5bn and adjusted EBITDA of US$370mln-US$400mln for the year to end-December 2022.
The sale of the company’s Built Environment Consulting division to WSP Global is expected to complete by the end of the third quarter. The net cash proceeds of around US$1.62bn from the disposal will “transform” its balance sheet and will be used to pay down debt, Wood Group said.
Net debt stood at US$1.75bn at the end of June, reflecting negative free cash flow of US$363mln in the first half.
CEO Ken Gilmartin said: “Since becoming CEO in July, I have been really encouraged to see the improving operational momentum across our business, including some great client wins. The strong order book gives me confidence for the future but there is a lot more to do on cash generation and this is our top priority.”