Wood Group powers on

Wood Group is doing more than all right in favourable energy markets, and expects strong cash-flow in the remainder of the year.

The group continues to deliver good growth and is confident of achieving full year performance in line with expectations.

The group is divided into three divisions - Engineering, PSN (production services network) and GTS (turbo-machinery) - and all three are performing well, though there are a few areas of concern.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The Engineering division is seeing high activity in the oil production (upstream), sub-sea and pipeline businesses. The order book and future prospects remain strong, the group said.

Things are looking less rosy in the downstream (products derived from oil and gas) business, where activity levels at US refineries have, as expected, been subdued. On the bright side, the group expects some improvement in the second half.

In Wood Group PSN, the strong performance in the North Sea and North America is continuing.

The main area of concern in this division is in Oman, where it is operating a loss-making contract. The good news is that things don't appear to be getting any worse, and the group continues to anticipate a full year loss of around $15m - $20m on the contract.

The Wood Group GTS division should deliver good earnings growth in the Maintenance and Power Solutions sectors.

"We anticipate strong operating cash flow in the second half, and our strong balance sheet provides a robust platform for growth," the statement said.

JH