Wood Group confirmed the slide in oil price has hit its financial results.
In a pre-close trading update for the first half of the year, the company said despite the dip it still expects full-year earnings before interest, tax and amortisation (EBITA) to adhere to analyst expectations.
A company statement said: “Financial performance in the first half of 2015 will demonstrate the relative resilience and flexibility of our asset-light, predominantly reimbursable model, but will be down on the first half of 2014 reflecting challenging conditions in oil and gas markets.
“To help offset the impact of lower activity and pricing pressure, we are delivering savings significantly in excess of original targets from our cost reduction initiatives, and continue to focus on utilisation.”
The firm labelled upstream activities “subdued” amid current market constraints. However, contracts for Det Norske’s Ivar Aasen in the Norwegian North Sea and Hess Stampede in the Gulf of Mexico have helped steady the company in the wake of dipped economic conditions.
The firm, which was forced to reduce its workforce, added that it was “seeing the impact of reduced project and non-essential maintenance work”.
The statement concluded: “Financial performance in the first half of 2015 will demonstrate the relative resilience and flexibility of our asset-light predominantly reimbursable model, but will be down on the first half of 2014 reflecting challenging market conditions.
“To help offset the impact of lower activity and pricing pressure, we are delivering savings significantly in excess of original targets from our cost reduction initiatives, and continue to focus on utilisation. There is no change to overall guidance and we continue to anticipate that full year EBITA will be broadly in line with analyst consensus.”
Meanwhile, the company today confirmed a $250million contract win for the North Sea’s CATS pipeline.
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