Amec suffers a profit fall but insists it will be able to deliver margin targets

City A.M. Reporter
CONCERNS over project delays overshadowed strong 2009 results from British oil services and engineering group Amec, knocking its shares yesterday.

AMEC posted a 13 per cent rise in 2009 earnings before tax, interest and amortisation (EBITA) and said it was on course for its 2010 margin goal in what it termed a “challenging trading environment.”

For 2009, the company reported EBITA of £208.3m on sales down three per cent at £2.6bn.

Amec, whose customers include BP, Royal Dutch Shell and EDF, achieved an EBITA margin of 8.2 per cent, compared to 7.1 per cent in 2008.

“We remain firmly on track to deliver our 2010 EBITA margin goal of 8.5 per cent,” chief executive Sam Brikho said.

The company, which is currently looking for acquisitions as part of a drive to double earnings per share by 2015, ended the year with £743m in net cash.

Many oil services companies have been hurt over the last year as oil majors and producing nations curtailed investment in new projects and delayed others following the plunge in the oil price. “2010 is expected to be another challenging year... There is expected to be increasing pricing pressure from customers,” Amec said in a statement.

Analysts at Deutsche Bank highlighted the relatively weak outlook linked to project award delays but said they believed any share price weakness was a buying opportunity.