Shares of Aberdeen-based global engineering group Wood plc fell about 5% on Tuesday after it published results for the year ended December 31, 2020, showing it failed to reinstate dividends as it made a pretax loss of $148.6 million compared to a profit of $148.7 million in 20219.
Wood said 2020 revenue fell 23.5% to $7.564 billion.
On its dividend policy, Wood said: “The uncertainties caused by the Covid-19 pandemic led to the board withdrawing its recommendation for payment of the 2019 final dividend and not declaring an interim or final 2020 dividend in order to protect cash flows and ensure balance sheet strength.
“The board recognises the importance of dividends to shareholders and is committed to reviewing the future policy once there is greater clarity on the longer-term impact of Covid-19 and increased market stability.
“Any decision to resume payment of a dividend will consider the group’s future profitability, cash requirements and focus on preserving long term value. ”
Wood’s shares have risen more than 40% in the past 12 months to give it a current stock market of roughly £2 billion.
Wood said it is “nearing resolution of the legacy investigations” which have affected the group.
It said discussions concerning the resolution of investigations by the SFO and authorities in the US, Brazil and Scotland “are at an advanced stage.”
The group said it anticipates “that all matters will be settled at an aggregate cost of $197m, including $46m provided in 2019.”
Wood said an additional provision of $151 million was booked in 2020.
“Cash settlement expected over the period of 2021-2024,” concluded Wood.
The company said a significant reduction in conventional energy activity was mitigated “by strength in built environment, growth in renewables and relatively robust revenues in process & chemicals.”
In its outlook, Wood said its order book was down 17.4% at December 31 at $6.5 billion, and it has an “expectation of lower activity and a continued focus on improving margin.”
Wood CEO Robin Watson said: “Our resilient financial performance in 2020 was underpinned by our strategic positioning across broad end markets and flexible business model.
“We saw growth in renewables activity, strength in the built environment and relatively robust revenue in process & chemicals 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, underpinned delivery of strong margins and a significant reduction in net debt.
“Looking ahead, we are pleased to be nearing resolution of the legacy investigations so that we will be able to draw a line under them and while near-term headwinds remain in 2021, we saw improving momentum in awards in late Q4 and are encouraged by the medium-term outlook for our markets.
“To ensure our business is fit for the accelerating pace of energy transition and the drive towards more sustainable infrastructure, we are today announcing programmes to unlock stronger medium-term growth, deliver efficiency and create value.”