Wood H1 revenue slips to $4.7bn; nuclear unit sold

Aberdeen-based engineering and oil services giant Wood plc said on Tuesday it agreed to sell its nuclear business to US group Jacobs for $305 million to help reduce its debt.

News of the sale came as Woods announced results for the six months to June 30, 2019, with revenue slipping 2.6% to $4.788 billion from $4.916 billion.

Wood shares edged 1% higher to around 455p on Tuesday morning to give it a current stock market value of around £3 billion, but they have fallen around 30% in the past year.

Wood employs 60,000 people in about 60 countries and recently acquired rival Amec Foster Wheeler.

Wood CEO Robin Watson said: “Strong margin improvement and profit growth in the first half was led by activities in energy markets in the eastern hemisphere and our environment and infrastructure operations in North America, together with cost synergies.

“We also made substantial progress on our non core asset disposal programme and have agreed the sale of our nuclear business for c$305m, with completion anticipated in Q1 2020.

“This will result in significant deleveraging and bring us close to our target leverage.

“With 87% of 2019 revenues delivered or secured we remain confident in our full year outlook and guidance is unchanged.

“Looking further ahead, we remain well positioned for growth across the energy and built environment markets.”

Wood’s chief financial officer David Kemp said: “Although our nuclear business is a strong UK player and has performed well, we see better opportunities to develop clear global leadership positions across other parts of our business.”

The Wood nuclear business designs, delivers and maintains strategic and complex nuclear assets for customers primarily in the UK.

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