Wood shares up 8% on earnings growth statement

Shares of Aberdeen-based global engineering and oil services giant Wood plc rose about 8% on Thursday after it said in a trading update it expects to deliver earnings growth in 2020.

In a trading update for the year ended December 31, 2019, Wood said it expects “adjusted EBITDA of $850m to $860m and operating profit before exceptionals of $410m to $420m, in line with current market expectations.”

Wood said its expects revenue of around $10 billion “in line with 2018.”

Wood shares rose almost 8% to around 398p to give the Aberdeen firm a current stock market value of around £2.5 billion.

Wood plc CEO Robin Watson said: “Our full year 2019 results will demonstrate earnings growth, margin improvement and strong operational cash generation, resulting in a reduction in net debt.

“In Q4 we outlined our clear strategy to focus on higher margin project management, operations and consulting activities and announced the formation of our Technical Consulting Solutions business.

“We also continue to make good progress on portfolio rationalisation.

“Looking ahead, our business is well positioned across its energy and built environment markets and we expect to deliver earnings growth in 2020.”

In its full-year 2020 outlook, Wood said: “We are well positioned for growth opportunities presented by trends in energy security & transition and sustainable infrastructure development across energy and built environment markets.

“In the Eastern hemisphere we expect growth in upstream oil & gas activity in Asia Pacific and in the Middle East, although there is some risk from geopolitical developments in the region.  

“Capital discipline remains prominent in our customers’ development decisions and this is evident in the Americas both in US onshore and offshore.

“The outlook for renewables is positive and we have a robust opportunity pipeline in US solar.  

“We are also observing an encouraging opportunity pipeline for downstream & chemicals work in the Middle East and Far East.

“Our Built Environment markets are expected to show further growth in 2020 as demand for environment and infrastructure solutions in the US remains robust.

“Overall, we expect modest revenue growth in 2020 and growth in adjusted EBITDA to reflect a continued focus on our medium term margin improvement strategy.”

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