Oilfield services company John Wood Group Plc, which bought smaller rival Amec Foster Wheeler last year, on March 20 forecast a modest growth in core profit for 2018 after reporting an 11.1% fall in full-year earnings.
Wood Group, which saw muted demand for its services over the last couple of years after oil producers cut budgets amid weak prices, said it expects early stage recovery in some areas of its core oil and gas market and cost synergies to boost its EBITA in 2018.
However, the company’s 2017 EBITA fell to $598 million from $673 million a year earlier on a pro forma basis, hurt by cost overruns on some non-oil and gas contracts.
Revenue also fell 12% to $9.9 billion on a pro forma basis.
Wood Group said its annualized cost savings from the Amec deal was ahead of plan with more than $40 million delivered to date. The company added it was confident of meeting its target of at least $170 million savings in three years from deal completion.
British oil services companies, including Wood Group, Amec and Petrofac Ltd., have faced issues after U.K.’s Serious Fraud Office launched a criminal probe last July into Monaco-based Unaoil in connection with suspected bribery, corruption and money laundering.
Wood Group said its internal investigation confirmed that a legacy Wood Group joint venture made payments to Unaoil under agency agreements, and added the company was working with Scotland’s Crown Office and Procurator Fiscal Service and the SFO.
The company said it was also co-operating with the U.S. Securities and Exchange Commission and the U.S. Department of Justice on their ongoing investigations into Amec related to Unaoil.
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