John Wood Profit Gains on U.S. Shale Demand, Maintains OutlookAnna Hirtenstein
John Wood Group Plc, the U.K.-based oil and gas services provider, reported a 32 percent gain in first-half pretax profit aided by strong U.S. shale activity and cost cuts.
Profit before taxes rose to $233.3 million from $176.3 million a year earlier, the Aberdeen, Scotland-based company said today in a statement. The average of two analyst pretax profit estimates compiled by Bloomberg was $182 million. Revenue climbed 10 percent to $3.8 billion, it said, keeping its outlook for the full year unchanged.
Measures to reduce costs in the North Sea have been implemented amid industry-wide concerns of rising operating expenses in the region. Wood Group cut day rates for contract workers by 10 percent “ahead of the market, but then the market followed,” Chief Executive Officer Bob Keiller said in the statement.
The company agreed last year to buy Elkhorn Holdings, a Wyoming-based provider of construction services for midstream oil and gas facilities in the U.S. shale market.
John Wood announced an interim dividend of 8.9 cents a share, 25 percent higher than a year earlier.
The shares rose as much as 4 percent to 781.50 pence and traded at 775 pence as of 8:43 in London.