Wood Group shares soar as earnings stay on track

Shares of Aberdeen-based engineering and oil services giant Wood plc rose about 9% on Thursday after it gave investors a positive trading update at its capital markets presentation.

Wood shares rose more than 9% to around 388p to give the Aberdeen company a current stock market value of about £2.4 billion.

Wood operates in more than 60 countries, employing around 60,000 people, and has revenues of around $10 billion.

Wood CEO Robin Watson presented on Wood’s strategy and positioning, including the formation of Technical Consulting Solutions (TCS) which brings together the capabilities of the group’s Specialist Technical Solutions (STS) and Environment and Infrastructure Solutions (E&IS).

“Wood today also confirms that the full year outlook for 2019 EBITDA remains broadly in line with consensus, despite the impact on activity of a slowing macro environment,” said Wood.

“Financial performance is benefitting from proactive cost reduction measures including accelerated synergy delivery from the formation of TCS. 

“In line with trading, our expectations on cashflow are broadly unchanged.

“The agreed sale of our nuclear business for c$305m is progressing as expected towards completion which is anticipated in Q1 2020 and will accelerate progress to target leverage.”

Wood said its Asset Solutions EAAA (AS EAAA) division has continued to perform strongly particularly in Operations Solutions Middle East, Caspian and Asia Pacific and Capital Projects, “albeit with reduced low margin procurement activity.”

It said its Asset Solutions Americas (ASA) is benefitting from increased downstream and chemicals activity although shale activity has slowed.

CEO Watson said: “We are confident Wood is well positioned to unlock growth opportunities from the emerging trends in our energy and built environment markets.”