Energy service business Wood Group said yesterday it expected to deliver growth this year but the unit it created after buying PSN still faced delays on a major Middle East project.
The Aberdeen-based company said Wood Group PSN’s performance was likely to be an improvement on last year, thanks to high activity in the North Sea, but the division was still tackling problems with a £500million project for Petroleum Development Oman (PDO).
Around 2,600 people were recruited for the seven-year deal with PDO, which was signed before Wood Group took over PSN last year.
Wood said yesterday the project still needed more skilled workers and it did not expect the contract to be profitable until next year.
In a trading update for the first six months of the year, the group added that as well as a strong performance in the UK it also saw opportunities for further work in America for Wood Group PSN, its global production-facility support division.
It said: “The Americas remain strong; particularly in the provision of production support services in the US shale regions, where we see opportunities for further growth.
“In international markets, losses are continuing on our significant long-term contract in Oman. Elsewhere, we remain active in Australia, Africa and the Caspian.”
Wood Group said it expected to deliver good growth overall this year, including a 30% increase in earnings before interest, taxation and amortisation to around £135million at its engineering business.
It added the increase would be helped by the division’s strong performance in the subsea and pipelines market, particularly in the UK and Australia.
The company said: “Our balance sheet remains strong and provides a robust platform for growth.
“The group has delivered good growth in the year to date and remains confident of achieving full-year performance in line with expectations.”
Wood Group recorded revenue of £3.5billion in 2011 and employs about 39,000 people worldwide.
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