LONDON (Alliance News) - John Wood Group PLC Tuesday reported a fall in profit in the first half of 2015 as expected but the company reaffirmed its commitment to grow the dividend and reiterated its full year outlook remains unchanged.
The oil engineering services company reported a expected fall in profit before tax and exceptional items of USD156.3 million in the first half of 2015, compared to a USD182.4 million profit a year earlier as revenue dropped to USD3.06 billion from USD3.80 billion.
Earnings before interest, tax and amortisation came in at USD225.9 million from USD243.9 million.
The company, like its peers, have been suffering from a lull in activity in the oil and gas sector as companies cut back on expenditure and investments in light of lower oil prices.
Despite the fall in earnings, the company upped its interim dividend to 9.8 cents per share from 8.9 cents per share a year earlier. That is in line with its policy and it reaffirmed its commitment to increase the dividend per share by a double digit percentage from 2015 onwards.
The company said it continues to lower costs in response to the downturn in the oil and gas sector, and said it has achieved USD40 million worth of overhead cost savings in the first half, which is "significantly ahead" of estimates.
The company has previously announced it would be lowering its headcount, and said this is down 13% from December.
"Conditions in oil & gas markets remain very challenging. Performance in the first half demonstrates our commitment to cost discipline and the resilience and flexibility of Wood Group's through cycle model. Our outlook for 2015 overall remains unchanged and we anticipate that full year performance will be in line with analyst consensus," it said.
In a separate statement Tuesday, the company said it has won a five-year "multi million dollar" contract with major Royal Dutch Shell PLC to provide services to four onshore oil fields in Gabon. That will be carried out by Wood Group PSN and the deal represents the subsidiary's first major contract in Gabon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Wood Group (J) (WG.)