Wood Group reported a revenue of $2.8 billion for H1 2024, down 5% with growth in Operations offset by lower revenue in Projects given lower pass-through activity, the company's strategic shift away from EPC and weakness in its minerals business, the company said.

 

Pass-through revenue in the period was $405 million compared to $506 million in HY23, with all the reduction in its Projects business. Excluding pass-through, group revenue was down 2%.

 

Adjusted EBITDA of $219 million was up 8.5% with margin expansion more than offsetting the revenue performance, reflecting its shift to a higher quality business, it said. Adjusted EBITDA margin of 7.7% compared to 6.8% last year, helped by improved pricing and lower EPC and pass-through work in Projects.

 

Ken Gilmartin, CEO, said: “These results demonstrate continued progress on our turnaround. Our strategy continues to deliver higher EBITDA and a larger order book, and we are improving the quality of our business with better pricing and higher margins. 

 

"Our Simplification programme is progressing at pace, with nearly half of the annualised $60 million savings from next year already secured. I am also pleased that we have achieved all of this while recording our highest level of employee satisfaction ever, putting Wood in the top quartile of all our peers and demonstrating that our team is focused and energised on driving Wood to its full potential.

 

“We have finalised our views on our exit from lump sum turnkey and large-scale EPC work and have reflected this in our results today, though crucially this has not changed our cash guidance. We have also recognised a non-cash goodwill impairment in our Projects business, which relates to legacy acquisitions.

 

“Generating sustainable, strong free cash flow continues to be an important focus for the delivery of our turnaround. Our adjusted operating cash flow was up in the period, and we continue to anticipate reducing cash drags going forward. We welcomed Arvind Balan as our new CFO in April and he has brought a renewed cash focus across the business.

 

“As we look ahead, we remain confident that our strategy, actions we are taking and growth potential across our markets will deliver significant value for our shareholders. We are pleased to reconfirm our outlook today, both for 2024 and 2025, including generating significant free cash flow in 2025,” he said.

 

Results highlights:

* Adjusted EBITDA up 8.5% to $219 million

* Order book up 3.6% to $6.2 billion

* Adjusted EBITDA margin expanded to 7.7%

* Continuation of improved pricing across its pipeline and order book

* The Simplification programme is moving at pace

* No change to our cash guidance

* 6-year contract with Shell for the world’s largest floating offshore LNG facility in Australia

* Completed FEED for the first phase of Aramco’s carbon capture project in Saudi Arabia

* Sustainable solutions revenue of c.$600 million represents 21% of group revenue

* Around 40% of factored sales pipeline now in sustainable solutions.

 

HY24 statutory results

* Operating loss of $899 million reflects the exceptional items in the period

* Exceptional items of $966 million (pre-tax)

 - $815 million impairment of goodwill and intangibles 

 - $140 million losses related to its exit from LSTK and large-scale EPC work

 - $12 million of Simplification costs

 - $6 million of costs related to Sidara’s takeover proposals in the period

* Loss for the period of $983 million

* Basic loss per share of 142.9c

* Cash flow from operating activities of $31 million was significantly improved on last year  -TradeArabia News Service