26th Mar 2015 07:45
LONDON (Alliance News) - Amec Foster Wheeler PLC Thursday reported lower profit for 2014, as the downturn in the oil and mining markets was only partially offset by growth in clean energy, and it warned that reduced spending plans by its customers was likely to further weigh on profit margins in 2015.
The recently merged oil services company reported a pretax profit of GBP155 million for 2014, down from GBP255 million in 2013, while the figure excluding exceptional items and discontinued operations fell to GBP317 million, from GBP343 million. That was largely in line with a consensus of analysts' expectations provided by the company of about GBP318 million.
Its closely-watched trading profit fell to GBP321 million, from GBP343 million, as trading margin dropped to 8.2% from 8.9%, more than offsetting a slight increase in revenue to GBP3.99 billion, from GBP3.97 billion. Analysts had expected revenue to fall to GBP3.81 billion according to the consensus forecasts.
"For 2015, we expect to see a continuation of recent trends - with growth in Clean Energy, downstream and Middle Eastern Oil & Gas markets offsetting tougher conditions elsewhere. This mix of performance, together with the increased customer pricing pressure and cost saving plans, is expected to lead to a modest reduction in like-for-like trading margins," it said.
However, recent movements in exchange rates, mainly the drop in sterling against the dollar, have proved favourable for the company, and it said that based on current market forecasts, the movements could add about GBP150 million to 2015 revenue. It said currency movements, mainly sterling's strength against the dollar had knocked about GBP238 million off 2014 revenue compared with the previous year.
It raised its full-year dividend to 43.3 pence a share, from 42.0p in 2013, including a final dividend of 28.5p.
On a pro-forma basis, which presents the results as though Foster Wheeler had been included for the whole comparative periods, trading profit fell to GBP457 million, from GBP537 million, as revenue declined to GBP5.80 billion from GBP6.09 billion and its trading margin fell to 8.3% from 9.7%. Its combined order book stood at GBP6.3 billion at the end of 2014, down from GBP6.5 billion a year earlier.
The company said revenue declined by GBP175 million in the Americas and by GBP108 million Europe, but increased by GBP54 million in its so-called growth regions.
Revenue from oil & gas was down 13%, mining was down 14% and environment and infrastructure down 3%, but revenue from clean energy was up 11%.
Foster Wheeler contributed GBP274 million to group's revenue during the last seven weeks of the year following its acquisition in November.
By Steve McGrath; [email protected]; @stevemcgrath1
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