The new boss at Aberdeen-headquartered energy services giant Wood (LON: WG) has said cash generation is a “top priority” after it plunged by nearly a third.
Wood reported a 30% tumble in free cash flow in its half-year results to negative $363m.
The drop is linked to a working capital outflow of $208 million, and $102 million of exceptional costs linked to a closed Serious Fraud Office (SFO) investigation and a loss-making contract for the US Government’s Aegis Poland anti-missile defence system.
The financials are the first set for newly-installed CEO Ken Gilmartin, who took over from Robin Watson in the top job in July.
Net debt is up by 21.5% on the same period last year to $2.15bn, which Wood said was linked to the negative cash flow.
Pre-tax losses stood at $31.5m, widening the deficit from $18.4m in H1 2021.
Elsewhere, however, Wood hailed operational momentum, with its order book up 5% to $6.4bn, and revenues broadly in line with the same period last year at $2.56bn.
Mr 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.
“We are developing an updated strategy for Wood that will draw on our core strengths, return us to growth and deliver sustainable free cash flow.
“We perform complex work in critical industries and our outstanding technical expertise and strong long-term client relationships position us well for growth across targeted markets.
“We have the consulting and engineering capabilities to help the world solve the global challenges of energy security, decarbonisation and energy transition.
“I look forward to sharing our plans at our capital markets day in November.
“In the meantime, we are focused on our culture and energising our people, performance excellence and strengthening our balance sheet through the completion of the sale of the Built Environment business, which we expect around the end of Q3”.
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