Aberdeen-based international energy service giant Wood Group said yesterday it had achieved a robust performance in challenging markets in the first half of 2009.
Chief executive Allister Langlands said activities in the North Sea had seen good growth, helped by winning new production facility contracts.
Companies awarding deals included TAQA Bratani, the UK arm of the Abu Dhabi national oil company; Canadian operator Ithaca Energy; Venture Production and Premier Oil.
Wood said market conditions remained challenging, however, with global exploration and production spending expected to reduce during 2009 by about 15% on last year, with lower volume and price deflation leading to lower revenue for service companies.
The company added: “Customers are focused on cost reduction and efficiency improvements, and we are successfully applying our services and products to help customers reduce their overall project and operating costs.
“We benefit from our focus on supporting customers’ operational expenditure, which represents around 55% of our revenue, and on customers’ longer-term capital projects.
“We believe recovering energy demand, reserve depletion and the development of more challenging reservoirs provides strong longer-term market fundamentals for our services and products.”
In their half-year report chairman Sir Ian Wood and Mr Langlands said: “In challenging energy markets, we continue to benefit from a robust performance in our production-support-related businesses and believe results for the year will be in line with expectations.
“The confidence in our longer-term outlook is reflected in the 11% increase in our interim dividend.”
Wood Group, which employs about 27,000 people worldwide in 50 countries, provides engineering design, production support, and industrial gas-turbine services for customers in the oil and gas and power-generation industries.
The group reported pre-tax profits of £97.45million for the six months to June 30, down from profits of almost £110million a year earlier.
It said revenue for the period was £1.46billion against £1.53billion the year before, but it noted that in constant-currency terms revenue had actually risen by 7%.
The group, which announced on Tuesday the purchase of a 55% stake in a Saudi Arabian engineering business, said it was always looking at small acquisitions of less than £60million.
Mr Langlands said: “There’s two or three things that we’re looking at now.”
Shares in the group ended the day down more than 5% at 308.4p.
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