12 December 2013
John Wood Group PLC
Pre-close trading update
John Wood Group PLC ("Wood Group" or "the Group") issues the following pre-close trading update for the year to 31 December 2013. Full year results will
be announced on 18 February 2014.
The Group has delivered good growth in 2013 and is confident of achieving
performance for the year in line with expectations. In 2014, the mix of opex
and capex activities in our business and the contribution from completed
acquisitions is expected to lead to growth overall.
Wood Group Engineering is on track to deliver EBITA growth in line with
previous guidance of 10-15%. In Upstream, the significant Mafumeira Sul and
Ichthys projects are beginning to wind down, with substantial completion of our
scope scheduled around the year end. We are active on a number of projects
including Anadarko Heidelberg and Hess Stampede in the Gulf of Mexico, and Det
Norske's Ivar Aasen project in the North Sea. In Western Canada, the market
remains weak. We see good prospects for a number of Upstream awards next year
although not of the scale of the significant projects nearing completion. In
Subsea & Pipelines, we are seeing good subsea activity overall, although there
is some slowdown in Australia. Onshore pipelines continues to benefit from
healthy US shale market activity. Downstream, process & industrial will deliver
an improved performance over 2012. Looking ahead, the completion of significant
projects and some deterioration in the themes we set out in our interim report
in August, principally project delays offshore together with upstream weakness
in Canada, is expected to result in a reduction in Engineering EBITA in 2014 of
Wood Group PSN is performing well, with growth led by our US onshore shale
related business. The North Sea remains a strong market in which we have
secured nine North Sea contract renewals over the last 12 months, providing
good revenue visibility and helping maintain our leading position. We are also
starting to see the benefit from Pyeroy's expansion with oil & gas customers.
In the Americas, we recently completed the acquisition of Elkhorn for a
consideration of $215m. Elkhorn is a Wyoming based construction services
provider, which will enhance our US shale exposure and complement our existing
construction, maintenance and fabrication activities. In international
markets,performance continues to be held back by our contract in Oman.
Underlying performance has improved in Oman although losses continue at a lower
rate, and further actions to address this position are being taken. Overall for
2014 we anticipate good growth, again led by our US onshore business.
In Wood Group GTS we expect that 2013 EBITA will be lower than 2012, in part
due to the impact of lower EBITA in Power Solutions and some recent deferrals
in Maintenance. The Dorad contract is on track to complete early in 2014.
Completion of our joint venture with Siemens is expected in the first half of
2014, at which point all of Wood Group's gas turbine-related activities will be
in joint ventures and will be reported within Wood Group PSN in the future.
Performance across the gas turbine joint ventures is expected to be flat for
2014, with growth in Maintenance offset by the impact of a lack of backlog in
The Group has a strong balance sheet and we continue to pursue organic and
acquisition led growth.
We remain confident of achieving 2013 performance in line with expectations. In
2014, the mix of opex and capex activities in our business and the contribution
from completed acquisitions is expected to lead to growth overall, with growth
in Wood Group PSN offsetting the reduction in Wood Group Engineering.
A telephone conference call for analysts will be held at 9:00 hours GMT today
with replay facilities available at www.woodgroup.com/investors Participant
dial-in details below:
UK : 0844 800 3850
International : +44 844 800 3850
Passcode : 915 892
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Notes to editors:
Wood Group is an international energy services company with around $7bn
revenues, employing around 44,000 people and operating in 50 countries. The
Group has three businesses - Wood Group Engineering, Wood Group PSN and Wood
Group GTS - providing a range of engineering, production support, maintenance
management and industrial gas turbine overhaul and repair services to the oil &
gas, and power generation industries worldwide.
Andrew Rose / Carolyn Smith +44 1224 851 000
Patrick Handley/ Rosheeka Field +44 20 7404 5959
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