- This year's final payout, 2016 dividend to be cut by half
- CEO Samir Brikho sees no sign of business trends changing
Amec Foster Wheeler Plc slumped by the most on record after saying it will cut dividends by half as the plunge in oil prices erodes earnings.
“We are taking the prudent step of cutting our ordinary dividend payments by 50 percent, starting with the final dividend for 2015,” the oil and gas engineering company said Thursday in a statement. That payout will be 14.2 pence a share, taking the full-year dividend to 29 pence.
Amec fell as much as 23 percent to 574 pence ($8.74) in London, the biggest drop in data going back to 1988. The shares have declined 32 percent this year to a six-year low.
Oil-services providers have suffered as their clients lower spending after crude prices tumbled. The downturn is forcing companies to cut costs, reduce jobs and look for additional funding to keep the business running. French peer CGG SA said Thursday it plans to sell shares and assets after reporting a $1.07 billion loss in the third quarter.
“For more than a year -- across many parts of our business -- we have seen customers reducing capital expenditure and putting more pricing pressure on the supply chain,” Chief Executive Officer Samir Brikho said in the statement. “We see no sign of these trends changing.”
Amec expects to refinance its debt in the next six months, either by selling bonds or borrowing from banks, the London-based company said. Net debt at the end of the year will be about 1.1 billion pounds.
Amec had an order book of 6.5 billion pounds at the end of September, compared with 6.6 billion pounds at the end of June.