LONDON (Alliance News) - John Wood Group Wednesday said its Engineering and Production Services businesses are performing slightly ahead of expectations on the year-to-date, but financial performance at its Turbine joint ventures has been adversely hit by delays to its Dorad contract in Israel.
The oil services company said that in its Engineering operations the pace of achieving awards remains slow, reflecting how operators are currently focusing on capital budgets but it remains active on a number of offshore projects and it expects to secure further opportunities during the remainder of 2014.
The company said that its sub-sea business is seeing good activity levels, and its onshore pipelines business is benefiting from positive US shale activity.
John Wood Group said its PSN production services business is performing well, and it is benefiting from a number of contract renewals in 2013, along with the strong development in the US shale market.
However, the company said that financial performance at its Turbine joint ventures operations is currently behind expectations, but it largely expects this to be recovered by the year end. The firm said it was hit by delays to the Dorad power plant contract, on which testing is complete and client handover is pending, leading to increased costs.
The company said that overall its trading outlook for the full year is unchanged, and it continues to expects earnings before interest, taxation, depreciation and amortisation to be up in 2014, with growth in its PSN business offsetting reductions in its Engineering operations.
The company said in February that it performed well in 2013, with strong pretax profit driven by higher revenues and margins. However it had warned of a fall in profits in its engineering unit during 2014.
It said at the time that pretax profit increased 14% to USD412.8 million for the full calendar year 2013 from USD361.4 million, slightly missing its analyst consensus figure of USD424 million.
John Wood Group said its revenues increased 3% to USD7.06 billion in 2013 from USD6.83 billion in 2012, with an 11% revenue increase at its engineering division and a 8.3% revenue increase at its PSN division significantly offsetting a 19% fall in revenues from its GTS, turbines division.
At the open, John Wood Group shares were up 0.8% at 775.50 pence.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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