Wood Group profits rise is fuelled by engineering unit

OIL industry services group John Wood yesterday reported a better than expected 16 per cent rise in full-year profits, helped by a strong performance at its core engineering unit where it expects to see further growth this year.

The company, which designs, builds and maintains oil and gas facilities and pipelines, said increased exploration and production (E&P) activity drove sales at its engineering unit, and it expects further growth at the division. “We are forecasting strong growth in engineering driven by increased E&P capex spend and have good visibility in our Wood Group GTS Power Solutions business into 2012,” the company said.

Last year’s earnings before interest, tax and amortisation (EBITDA) were up 15.6 per cent at $398.7m (£252.5m), ahead of a consensus market forecast of $364m according to a company-supplied survey of analysts’ estimates.

The engineering division’s EBITDA rose 33 per cent, the company said, accounting for nearly half of group earnings. “During 2011, we saw E&P spend growing at around 10 per cent on a global basis,” chief executive Allister Langlands said. “We see an increase in the range of 5-10 per cent in 2012. It could well be spending ultimately grows towards the top of that range.”