Increased global oil and gas investment will continue to help underpin growth at energy service firm Wood Group in 2012, it said yesterday.
The Aberdeen-based group saw revenue rise by 40% to £3.5billion in 2011, boosted by its £606million acquisition of PSN.
Staffing at the business has also boomed from 24,000 in 2010 to nearly 39,000 last year, with most of the increase at new division Wood Group PSN.
Wood Group said, however, it was strong growth in its engineering service division – responsible for about £915million of its revenue – driven by increased upstream and subsea and pipelines that helped increase profits.
The firm also predicted growth across all three of its divisions – engineering, Wood Group PSN and Wood Group GTS – would continue in 2012, with global exploration and production spending predicted to rise 10-15% and mature-asset budgets also due to remain high.
Chief executive Allister Langlands said demand for energy would continue to drive global investment, but it was hard to predict where exactly future growth would be.
He said: “Probably five years ago we wouldn’t have predicted growth in the North Sea. Then in North America the growth of the shale plays transformed plays there. If you look across the piece, there are quite a lot of areas seeing growth: Canada, North America, Australia, the Caspian, Africa.”
Wood Group sold its well service division when it bought PSN last year to focus on development and field life support.
Mr Langlands said the company would continue to look at organic growth and acquisitions. He said North America remained its largest area of business, with 30% of revenue.
The North Sea was the majority of its European business (about 20% of revenue) and the Middle East and Africa accounted for about 15% of revenue between them. The rest was mainly Latin America, the Caspian, Asia-Pacific and Australia.
Pre-tax profits from continuing operations rose by 62.7% to £160million, from £98.4million in 2010. Operating profits, before exceptional items, were £166million, against £119million in 2010. PSN, with 2011 revenue of £1.9billion, 40% in the North Sea, exceeded expectations, through strength in the North Sea and North America, however, the group said it was held back by previously announced losses on projects in Oman and Colombia.
GTS, with revenue of £694million, up from £507million in 2010, saw strength in its maintenance business and two major projects would keep it busy through 2012 and beyond.
Wood Group had about 6,000 people onshore and offshore in the north-east last year and that has now reached 9,000. Chairman Sir Ian Wood will be 70 in July and has said previously he would be disappointed if he had not stepped down from the post by then, however, there was no further news on this yesterday.
The group said the board kept under review management succession for all senior bosses, including Sir Ian, but that at this time there was nothing to update the market on.
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