AMEC cuts revenue outlook as weak mining sector hits profit

 
Suzie Neuwirth
ENGINEERING firm AMEC yesterday cut its revenue outlook for the year, after falling demand in the mining sector led half-year profits to miss forecasts.

The FTSE 100-listed company, which provides services and equipment for the oil and gas, mining, nuclear and renewable energy sectors, said it expects full-year revenue to be in line with 2012, having previously forecast low to mid single digit growth.

“This is due to significant weakness in the mining sector, which was down 25 per cent in the first half,” chief financial officer Ian McHoul told City A.M.

Core profit rose four per cent to £158m, falling short of analysts’ expectations of £163m.

However, AMEC increased its dividend by 15 per cent to 13.5p per share, as it is “confident in the outlook of the industry”, according to McHoul.

AMEC continues to forecast margin expansion for the second half of the year, partly due to integrating its cost base and consolidating offices, which McHoul said would involve some staff cuts.

The firm continues to look for an acquisition in the oil and gas division, but said it will consider a cash return to shareholders if no progress has been made by the fourth quarter.

“This will perhaps be a share buyback or special dividend”, added McHoul.