(Alliance News) - John Wood Group PLC said on Tuesday it swung to a half-year profit despite a fall in revenue and also announced the sale of its nuclear subsidiary for USD305.0 million.
In the six months to June 30, the oilfield services company reported a pretax profit of USD62.2 million compared with a loss of USD25.3 million in 2018, which at the time was attributed to the costs of its purchase of Amec Foster Wheeler. Pretax profit before exceptional items, like redundancy and restructuring outgoings, was USD91.1 million, representing a 20% rise from USD75.8 million from 2018.
The FTSE 250 company suffered a 2.6% year-on-year revenue fall, however, to USD4.79 billion from USD4.92 billion.
John Wood will pay an interim dividend of 11.4 cents per share, up slightly from last year's half-year payout of 11.3 cents. It said this was in line with its progressive dividend policy.
John Wood shares were up 0.8% at 454.60 pence on Tuesday morning in London.
The USD305.0 million sale of the nuclear business is to the US's Jacobs Engineering Group Inc. The deal is expected to close in the first quarter of 2020. Jacob has agreed to pay GBP7.5 million if UK regulators do not sanction the acquisition, John Wood said.
Proceeds from the nuclear unit disposal will be used to reduce net debt and enable John Wood to take a "significant step towards achieving its target leverage policy".
Looking ahead, John Wood's full-year guidance remains unchanged, and it expects growth in adjusted earnings, before interest, taxation, depreciation and amortisation in all of its business segments. The adjusted Ebitda figure does not include the impact of adoption of a new accounting system, it noted.
First-half adjusted Ebitda in the Asset Solutions Europe, Africa, Asia & Australia unit grew by 66% to USD158.0 million from USD95.0 million, while the Americas Asset Solutions division saw adjusted Ebitda growth of 15% to USD121.0 million from USD105.0 million.
The Specialist Technical Solutions division delivered adjusted Ebitda growth of 18% to USD80.0 million from USD60.0 million with Environment & Infrastructure Solutions growing 61% to USD58.0 million from USD36.0 million.
Adjusted Ebitda in its Investment Services unit fell 9.8% to USD14.8 million from USD16.4 million however.
Chief Executive Robin Watson said: "Strong margin improvement and profit growth in the first half was led by activities in energy markets in the eastern hemisphere and our environment and infrastructure operations in North America, together with cost synergies.
"We also made substantial progress on our non core asset disposal programme and have agreed the sale of our nuclear business for USD305.0m. This will result in significant deleveraging and bring us close to our target leverage. With 87% of 2019 revenues delivered or secured we remain confident in our full year outlook and guidance is unchanged. Looking further ahead, we remain well positioned for growth across the energy and built environment markets."
Wood Group (J) (WG.)