Amec Posts Lower Profit on Currency, Sees ‘Modest’ Revenue Gain
Amec Plc (AMEC)’s first-half profit fell 4.4 percent following currency fluctuations and a slowdown in the U.S. business. The U.K.’s second-biggest oil and gas engineer said it expects “modest” revenue growth this year.
Earnings before interest, tax and amortization dropped to 152 million pounds ($256 million) in the six months ended June 30 from 159 million pounds a year earlier, the London-based company said today in a statement. The company raised its dividend to 14.8 pence a share, even as revenue declined 7 percent to 1.85 billion pounds.
“We now expect to see modest underlying revenue growth in 2014 for our existing operations,” Chief Executive Officer Samir Brikho said in the statement. “A 10 percent increase in the interim dividend signals our belief in the underlying strength of Amec.”
Amec shares dropped as much as 1.7 percent to 1,070 pence in early London trading and were at 1,082 pence as of 8:03 a.m.
The company faced a 160 million-pound impact of adverse currency translation arising from the strength of the pound. Current exchange rates and forecast average North American exchange rates for the rest of the year continue to poorer than 2013, the company said. That would drag full-year revenue down by about 250 million pounds and Ebita by about 25 million pounds, according to the statement.
The company reported a slowdown in conventional oil and gas and continued weakness in oil sands in its U.S. business.
Amec, which agreed to buy U.S.-traded Foster Wheeler AG earlier this year to expand its geographic footprint, won contracts including in the North Sea, and was the preferred bidder for Poland’s first nuclear power plant. The Foster Wheeler deal is expected to close in the fourth quarter, Amec said today.
The order book was up 16 percent to 4.2 billion pounds.
To contact the reporter on this story: Nidaa Bakhsh in London at email@example.com