Wood Group Falls Most in 2 1/2 Years in London on EarningsNidaa Bakhsh
John Wood Group Plc fell the most in 2 1/2 years in London after the U.K. oil-services provider said results have been worse than expected in Oman this year and profit at its engineering unit is seen weakening in 2014.
The group fell 9.9 percent to 718 pence, the biggest slump since July 2011. That values the company at 2.7 billion pounds ($4.4 billion). Trading volumes were four times the three-month average.
Earnings before interest, tax and amortization in engineering are seen sliding by about 15 percent next year, mainly after offshore project delays and weakness in Canada, the Aberdeen-based company said today in a statement.
“The biggest negative was the downgrade in engineering earnings,” Sanjeev Bahl, a Numis Securities Ltd. oil and gas analyst, said by phone. “The sector is expecting low to single-digit growth next year and that’s not getting people excited.”
Work on the Ichthys project in Australia and Mafumeira Sul in Angola is winding down. The group expects to win work in the upstream, or exploration and production, industry “although not of the scale of the significant projects nearing completion.”
The company said it’s seeking to address its performance in Oman, which continues to lose money, though at a lower rate.
Wood Group still sees growth in 2014, with weak engineering countered by a “healthy” U.S. shale market, the company said.