13th May 2015 06:39
LONDON (Alliance News) - John Wood Group PLC Wednesday said its overall performance in 2015 is down from 2014, as expected, but "reflects the relative resilience" of its business model and said its full-year earnings should be in line with analysts consensus.
The FTSE 250 oil and gas service company said it has improved visibility on customers' spending plans for the rest of the year but reiterated that market conditions remain challenging.
"We are flexible and asset light, with a range of predominantly reimbursable activities across customers' operating expenditure and capital expenditure spending. We remain focused on selling, general and administrative cost reduction and utilisation, and are helping customers to reduce their project costs, increase operating efficiency and safely improve performance," it said.
Wood Group said it aims to reduce its costs by USD30 million in 2015.
In 2015, Wood Group is expecting to deliver "strong cash flow" and said it has a strong balance sheet which provides security and flexibility.
Its upstream division "remains subdued" but it said it recognises that there is currently a high volume of early stage work as customers look to re-engineer projects to try and improve there economics. Its downstream division is "performing well".
Wood Group PSN, which services brownfield operations, has been hit by the decline in the rig count in the US whilst continuing to reduce contractor rates in the UK North Sea. But the company said it still sees longer-term opportunities in the area.
In a separate statment, John Wood Group said it has secured a USD250 million from oil giant BP PLC. The five-year contract was secured through PSN and will see Wood Group deliver engineering, procurement and construction services to BP's 13 upstream offshore facilities, located within the Greater Cassia and Greater Mahogany areas in Trinidad.
By Joshua Warner; [email protected]; @JoshAlliance
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