Wood Group today said its “asset light predominantly reimbursable business model” was starting to pay-off.
The company, which has been forced to cut costs and jobs, said it was in a stronger financial position. However, it still expects earnings to be 20% down year-on-year.
The service firm updated shareholders as part of its pre-close trading update for the first six months of the year.
A company spokesperson said: “We expect financial performance in the first half of 2016 to demonstrate the benefits of our asset light, predominantly reimbursable business model, our attention to management of utilisation and significant overhead cost savings from reorganisation, delayering and back office rationalisation.
“We remain confident that our asset life cycle service offering, specialist technical solutions and geographic footprint position us well in the current environment and for when market conditions recover. Overall the outlook for the full year has not changed and there is no change to EBITA guidance of around 20% down on 2015 as given in May.”
In the North Sea, the Wood Group has landed deals Chevron, Enquest, Nexen, Shell, Talisman, Taqa and Total. Its recent takeover of Enterprise Engineering Services Ltd will help it as it works “towards further in house and customer efficiencies”, according to Wood Group.
The firm said its international business performance was “robust” and highlighted the Middle East as an area for future growth.
The spokesman added: “Our strong balance sheet and committed long term financing allows us to reinvest in the business through acquisition and organic investment. Our intention remains to increase the dividend per share by a double digit percentage for 2016.”
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