Aberdeen’s Wood expects 23% revenue fall to $7.6bn

Shares of Aberdeen-based global engineering group Wood plc fell about 3% on Thursday after it said it expects 2020 revenue to fall about 23% to around $7.6 billion “against a backdrop of the impact of Covid-19 and oil price volatility.”

In a trading update for the year ended December 31, 2020, Wood said its order book was down 22% at $6.2 billion.

Wood said it expects its preferred profit measure of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to fall to around $620 million-$640 million from $855 million in 2019.

That would be towards the bottom of the consensus among analysts for 2020 adjusted EBITDA which is $658 million with a range of $634 million to $677 million.

Wood said operating profit before exceptionals will be around $215 million to $235 million.

That would compare to consensus among analysts for operating profit (pre-exceptional items) of $238m with a range of $152 million to $264 million.

The Aberdeen group said it delivered significant net debt reduction of $400 million to around $1.03 billion.

Wood CEO Robin Watson said: “Resilient financial performance in 2020 was underpinned by our broad end market exposure and flexible business model.

“We saw growth in renewables activity, strength in the built environment and relatively robust revenue in chemicals & downstream and we continued to win work, against the challenging backdrop of Covid-19 and oil price volatility.  

“Our decisive actions focused on the health & safety of our people, delivering for our clients, reducing cost, protecting the balance sheet and generating strong cashflow.

“These actions underpinned the delivery of strong margins and a further reduction in net debt.

“Looking ahead, while near term headwinds remain in 2021, we see significant opportunities from the accelerating pace of energy transition and will optimise our operating model to unlock stronger medium term growth.”

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