Oil services supplier Wood Group forecast an annual performance in line with hopes and ahead of 2013 thanks to growth in its PSN production services arm and US shale gas.
The company, which provides engineering, procurement and construction management, facility operations and maintenance, and turbine repair and overhaul, said PSN’s North Sea business was robust and benefiting from service expansion while its international operation had won deals in Asia and Australia.
It said a good performance in the Americas, led by typically higher margin US shale work and the benefit of the Elkhorn business acquired in 2013, was driving growth in PSN.
It said a good performance in the subsea, pipelines and refining part of its engineering business was helping to offset a lower contribution from oil exploration and drilling services.
‘There is no change in the slower pace of detailed upstream offshore engineering awards, although we have seen higher levels of early stage engineering work in 2014 which is an encouraging indicator of future activity,’ it said in a trading update.
It continues to expect a significant improvement in turbine activities in the second half, although pre-tax earnings before interest, depreciation and amortisation this year will fall short of 2013.
Wood added: ‘We are confident of an improvement in cash generated from operations in the second half. The balance sheet remains strong and provides a good platform for organic and acquisition-led growth.
‘Overall, we continue to anticipate performance in line with expectations and up on 2013, led by growth in PSN production services.’