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