Wood Plc’s 2018 profit topped market expectations as the British oil field and engineering services provider trumpeted the success of its 2017 takeover of smaller rival Amec Foster Wheeler and increased revenue synergies from the deal.
Aberdeen-based Wood said on March 19 it had secured contracts worth over $600 million following the Amec Foster deal, winning business as a combined group that neither company would have been able to do on a standalone basis. That was revised from the previously reported $500 million.
The FTSE-250 company, which provides engineering, project and technical services to industrial, energy, process and utility markets, said its annual results had benefited from favorable conditions in energy and industrial end markets.
But Wood, which warned last year that the volatility in crude prices might dampen confidence, noted that a recovery in oil and gas market was slower.
That aided Wood’s adjusted EBITDA to rise 5.4%, on a pro forma basis, to $630 million for 2018, coming in above a company-supplied analyst consensus estimate of $624 million.
Its order book stood at $10.3 billion, and Wood said that about 60% of its revenue target for the current year was secured.
Orders won recently included engineering, procurement, construction and commissioning contracts with Saudi Aramco and SABIC to support their integrated crude oils-to-chemicals complex, Wood said.
Wood, which provides engineering, project and technical services to industrial, energy, process and utility markets, said separately that Ian Marchant would resign as chairman in the next 12 months.
“There is a very positive medium-term outlook for Wood’s broader end markets,” Marchant said.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.3 million barrels to 31.2 million barrels. That’s the lowest level since October 2018, and points to tightness in the market that may take some time to alleviate.
Shipping rates across all routes are up this week and will likely break previous record high levels, a Singapore-based LNG trader said.
For China—which has this year overtaken Japan as the world's top LNG buyer—the deals will be its single largest LNG trade agreement in terms of volumes without an equity stake, a senior Beijing-based gas industry source said.