Energy service giant Wood Group said yesterday delays in its gas-turbine division (GTS) should recover by the end of the year to allow the group to meet its earnings targets.
The Aberdeen-based business enjoyed a jump in profits last year, thanks to increased spending from oil and gas operators worldwide, with earnings before interest, taxation and amortisation up 35% to £305million.
Speaking at Wood Group’s annual meeting, chief executive Bob Keiller said: “We’re looking at a lower level of growth in 2013 than we achieved in 2012 and 2011 indeed, but we are part of a competitive arena where customers make spending decisions.”
The group said it expected about 15% growth in its earnings this year before interest, tax and amortisation.
Mr Keiller added that the group’s continued growth was down to sales efforts over two years and work put into reshaping the business and training staff.
European peers such as Aker Solutions, of Norway, and Italy’s Saipem both issued profit warnings earlier this year.
Mr Keiller was upbeat about two potential clouds on the firm’s horizon.
He said the delays in overhauling motors at Wood Group GTS had been a phasing issue rather than a drop-off in overall sales, with forecast earnings for the division still achievable. Regarding a poorly performing project in Oman at production-facility support division Wood Group PSN, Mr Keiller said: “The performance in the contract has improved in line with where we expect and we remain confident that we will see it returning to profit in 2014.”
Performance at WGPSN and the company’s engineering division was in line with expectations, with growth coming from the North Sea and shale in the US.
Group chairman Allister Langlands, who took up the post on Sir Ian Wood’s retirement last November, hailed his predecessor as an “extraordinary leader”.
Sir Ian was not present at the AGM. The firm’s shares closed down 3% at 801.5p.
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