Wednesday 12 December 2018 9:01 am

Wood Group says 2018 performance in line with expectations but warns of future oil market volatility

Ftse 250 oil field services company Wood Group said today that its 2018 performance has been in line with expectations, but warned of future market volatility.

The company said it expects full-year revenue to be more than 10 per cent up on 2017, in the region of $10.9bn (£8.7bn) to $11.1bn.

It said it expects earnings before interest, taxation and amortisation to be in the range of $620m-$630m.

Looking forward the company said although its medium term outlook remains positive, recent volatility in oil and gas prices may hit confidence and and the pace of contract awards.

Wood Group said it expects further earnings growth in 2019 “underpinned by additional cost synergy delivery with an impact of around $60m”.

Its share price fell 7.33 per cent this morning following the announcement.

John Moore, senior investment manager at Brewin Dolphin, said: “Earnings have fallen slightly short of what some analysts were hoping for, but Wood Group’s latest update is more or less in line with expectations. 

"The trading environment for the oil services market, as a whole, remains very mixed: volatility in the oil price, financial uncertainty at some operators, and cost-saving targets at certain oil majors will act as an immediate drag."

Wood Group chief executive Robin Watson said: "Wood returned to growth in 2018 and performance is in line with guidance and expectations. In 2018 good momentum in trading has driven revenue growth of over 10 per cent; we secured revenue synergies of over $500m and increased our cost synergy targets to over $210m.

"Integration is complete and our unique platform is generating strong operational cashflows which are supporting good progress on our deleveraging plan."