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LONDON (Alliance News) - John Wood Group PLC said on Tuesday it swung to a loss in the first half of 2018 due to its purchase of Amec Foster Wheeler, in spite of strong revenue growth.
The FTSE 250-listed oilfield services company swung to a pretax loss for the six months to the end of June on a proforma basis of USD25.3 million from a profit of USD13.5 million the year before, due to a one-off cost of USD101.1 million.
The loss stemmed from bank fees related to the GBP2.20 billion acquisition of peer Amec Foster Wheeler, which completed in October.
On an underlying basis, pretax profit rose to USD82.0 million from USD64.2 million.
John Wood's revenue saw double digit growth, rising by 13% to USD5.38 billion from USD4.74 billion on a proforma basis the year before, due to growth in the company's Asset Solutions Business with increased capital projects activity.
There was also increased volumes in minerals processing, nuclear and automation & control in the STS division.
John Wood will pay an interim dividend of 11.3 cents per share, up from 11.1 cents the prior year.
The group is confident of a stronger second half, with a strong order book currently at USD10.60 billion. With 85% of 2018 revenue delivered or secured, John Wood has left its full-year outlook unchanged.
"Performance in the first half is at the upper end of our guidance range, reflecting continued momentum in trading and delivery of cost and revenue synergies. Integration is ahead of schedule and we are increasing our three year cost synergy target from at least USD170 million to at least USD210 million," said Chief Executive Robin Watson.
"Wood is delivering strong operational cashflows which underpin our deleveraging plan. We have good revenue visibility and remain confident of delivering a stronger second half. Our full year outlook is unchanged; we are seeing recovery in our core oil & gas market and good contract awards in broader industrial sectors," Watson added.
John Wood on Monday said it secured a six-year contract to provider asset management services to oil major Royal Dutch Shell PLC's Malampaya deepwater gas-to-power project located in the Philippines.
Shares in John Wood Group were up 4.2% at 689.20 pence, the second best performer in the FTSE 250 on Tuesday.
