Wood Group reports annual loss of $30m after digesting costs of $2bn merger with rival N. Sea contractor

Robin Watson
Robin Watson

Scottish oilfield services conglomerate Wood Group sank into the red in its last financial year after struggling to digest additional costs and write-offs related to its £2 billion merger with rival N. Sea contractor Amec Foster Wheeler.

In the 12 months ending December 2017, Wood reported a loss of $30 million – a drop of 187% from profits of $34.4 million in 2016.

Operating profit, before exceptional costs, dipped 13% to $212 million from $244 million.

But this is all going according to plan, according to Wood Group chief executive Robin Watson.

He said: “2017 was a year of transformational strategic development. The acquisition of Amec Foster Wheeler brought together two businesses and three brands to create Wood, a global leader in project, engineering and technical services delivery.

“We are now a broader business with multi-sector, full service capability across energy and industrial markets and a stronger, more balanced offering in oil & gas.

“Integration is progressing ahead of schedule with initial cost synergies achieved earlier than plan. Financial performance for 2017 is in line with guidance. I am confident we have a unique platform to unlock revenue synergies and generate good longer term growth”

Operating profit before exceptional items is stated after non-cash amortisation charges of $141 million – including $32 million of amortisation of intangibles arising on the acquisition of Amec Foster Wheeler

Loss for the period is stated after exceptional costs of $165 million – including $67 million in respect of the acquisition of Amec Foster Wheeler and restructuring and integration costs of $51 million.

Meanwhile Wood Group is continuing to co-operate with the UK Serious Fraud Squad probe into corruption allegations relating to Amec prior to their merger.

21 Mar 2019

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