Wood Group backs full-year outlook despite revenue dip

11th Jul 2024 07:54

(Sharecast News) - John Wood Group reiterated its full-year outlook on Thursday, despite a fall in interim revenues.

Updating on trading, the engineering services firm said revenues fell 6% in the six months to 30 June to $2.8bn, after strong growth in its operations division was offset by a poorer performance in projects.

In particular, Wood said it was continuing to see weakness in its minerals business as well as lower pass-through activity.

However, adjusted earnings before interest, tax, depreciation and amortisation rose 4% to $210m, after the margin improved to 7.4% from 6.8% a year later.

The order book was also up 2%, at $6.1bn.

As a result, the Aberdeen-based firm reiterated its full-year guidance, for high single digit growth in adjusted EBITDA before the impact of disposals. It added that the performance would be weighted to the second half, reflecting the seasonality of the business.

It also reconfirmed its 2025 outlook, with EBITDA growth expected to exceed its medium-growth target.

Ken Gilmartin, chief executive, said: "Our growth strategy continues to deliver, with further growth in EBITDA and order book.

"Crucially, we are now seeing the improving the quality of our business coming through with margin expansion as we focus on engineering services and consulting and move away from EPC [engineering, procurement and construction] work.

"As we look ahead, we remain focused on delivering our potential, including significant free cash flow next year."

As at 0900 BST, shares in Wood were down 1% at 204.97p.

Wood is due to publish interim numbers on 20 August.