LONDON (Alliance News) - Amec Foster Wheeler PLC Tuesday reported a surprise lift in revenue during the first half of the year after achieving record levels from the solar division and UK North Sea unit, but said it entered the red after booking some substantial impairments.
The oil and gas engineering firm warned earlier this year that like-for-like revenue would be slightly lower in 2016, but on Tuesday revealed revenue rose 7.0% in the first half of the year.
Revenue amounted to GBP2.84 billion compared to GBP2.66 billion the year before thanks to record levels of revenue from solar projects and the UK North Sea, which was partly offset by a weak performance in the oil and gas unit in the Americas.
A non-cash impairment charge totalling GBP440.0 million was booked in the half, plunging the company into the red as it reported a pretax loss of GBP446.0 million compared to a GBP73.0 million profit the year before.
Before exceptional items, pretax profit amounted to GBP137.0 million in the first half of 2016, compared to GBP165.0 million the year before.
The interim dividend, as expected, was also severely cut from the previous year, dropping to 7.4 pence in the first half of 2016 from the 14.8 pence paid the year before.
Net debt at the end of June stood at GBP1.08 billion, up 13% from GBP957.0 million at the end of June 2015. Amec Foster Wheeler is still hoping to have net debt down to GBP1.10 billion by the end of the year, excluding asset disposals, which are also expected to generate GBP500.0 million of proceeds by June 2017.
That net debt target has been changed from the original goal to have net debt of GBP1.00 billion by the end of the year.
The order book at the end of June stood at GBP6.20 billion, dropping 9.0% from GBP6.60 billion a year earlier.
"I have initiated a wide-ranging review of the strategy, our organisation structure and cost base - which we are now part-way through. I expect to update investors on these issues in the autumn," said Chief Executive Jonathan Lewis, who took over earlier this year.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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