Amec Drops on Outlook for Stagnant Orders in Oil Engineering
Amec Plc, a U.K.-based oil and gas engineer, fell the most in 18 months in London trading after saying its order book is unlikely to change this year.
Amec dropped 7.3 percent to close at 1,042 pence, the biggest one-day decline since August 2011, after forecasting a similar volume of orders in 2013 to last year’s 3.6 billion pounds ($5.6 billion). Profit margins shrank to 8 percent in 2012 from 9.2 percent, the company said today in a statement.
European oil-service providers have seen margins squeezed as higher crude prices boost competition, driving up costs in the industry. Saipem SpA, the region’s largest provider, said last month that 2013 earnings would be less than half expected levels because of delays to contract awards, reduced operations and less profitable agreements with customers.
About 4.2 million Amec shares traded today, more than triple the three-month daily average.
The company reported a 28 percent jump in annual sales to 4.2 billion pounds and said it expects “low-to-mid single digit” revenue growth this year. Margins will improve “gradually,” it said.
“The relatively lackluster outlook statement could see consensus for 2013 fall, creating some short-term weakness,” Oriel Securities Ltd. said today in a note, keeping its add rating on the stock.
Amec, based in London, increased its dividend by 20 percent to 36.5 pence a share.
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