Oman delays weigh on John Wood Group

 
City A.M. Reporter
BRITISH energy services company John Wood Group is working hard to resolve problems with two key contracts that are holding it back, its chief executive said yesterday.

Delays in a contract with Petroleum Development Oman have ratcheted up losses on the project and weighed on John Wood’s shares, but the company said that it expects improvement in the next year. It said that losses in Oman would be $15m (£9m) to $20m in 2012.

“The financial performance on that contract has been disappointing but ... we’ve got a really good dialogue going with the client in a range of areas,” chief executive Allister Langlands said.

The contract doubts partly eclipsed strong growth in other parts of the business, with demand from companies working in the North Sea, Gulf of Mexico and in US shale helping to drive first-half revenues up 27 per cent at its engineering unit.

The company said that it expects to meet full-year expectations and intends to pay a total dividend of 17 cents per share, up 26 per cent.

Earnings before interest and tax were $205m in the six months to 30 June, up 53 per cent year on year. Revenues rose 36 per cent to $3.35bn.