Strong oil and gas activity lifts AMEC amid mining slowdown

OIL engineer AMEC yesterday reported trading in-line with expectations, just two days after fellow energy services provider Cape issued a profit warning.

Strong oil and gas activity in the North Sea, Gulf of Mexico and west Africa boosted AMEC in the year to date, although mining activity slowed. The oil and gas division accounts for about 30 per cent of AMEC’s business.

The oil and gas infrastructure firm said it remained on track to deliver double-digit underlying revenue growth for the full year, and growth is expected to continue into 2013.

Chief executive Samir Brikho said yesterday that demand for AMEC’s services remained good, despite the “ongoing economic uncertainty”.

As at 31 October, the order book stood at £3.6bn, up slightly from £3.3bn last October. Since June, AMEC has won contracts in the North Sea, Kuwait and Slovakia.

Net cash for the group dropped to £124m from £430m last year, after acquisition-related outflows, as the company completed two acquisitions in the first half of 2012.

Kevin Lapwood, industrial goods and services research analyst at Seymour Pierce, said AMEC continued to benefit from strong growth in Brazil, and being BP’s global engineering partner in the North Sea and the Middle East.