16th Mar 2021 11:34
(Alliance News) -Â John Wood Group PLC on Tuesday reported a swing to loss for 2020 and also said it has reached a settlement with Scottish authorities in relation to a Unaoil investigation.
The civil settlement, reached between John Wood subsidiary WGPSN (Holdings) and Scotland's Civil Recovery Unit, relates to conduct in Kazakhstan between 2008 and 2010.
A joint venture in the legacy PSN business, which was acquired by John Wood in 2011, paid Unaoil the equivalent of around USD8.7 million at that time in fees. Payments were on a commission basis and continued until 2015 although there is "limited evidence" of what services Unaoil provided for these fees.
"The settlement concludes the issue which started after Wood self-reported having conducted a thorough internal investigation, before cooperating fully with COPFS and the Civil Recovery Unit throughout their investigation," said John Wood.
John Wood will pay GBP6.5 million to the Crown Office & Procurator Fiscal Service.
Turning to the 2020 results, the energy services and infrastructure group reported revenue of USD7.56 billion, down 24% from USD9.89 billion in 2019. The firm swung to a pretax loss of USD148.6 million from a profit of USD148.7 million.
The company noted that the global engineering and consultancy market faced "unique and unparalleled challenges" from the pandemic and oil price volatility in 2020.
The FTSE 250 constituent said: "Despite improving commodity pricing we have seen delays to larger conventional energy awards and deferral of investment decisions in process & chemicals being partly offset by strength in the built environment and robustness in renewables. Although the enduring impacts of Covid-19 remain uncertain, we have seen some signs of markets stabilising in the second half of 2020 and improving momentum in awards at the end of the year."
John Wood said it expects lower activity in 2021, and its objective will continue to be improving its earnings before interest, taxes, depreciation and amortisation margin towards a medium-term target of a 100 basis point improvement over 2019's 8.6%. The margin was 8.3% for 2020.
"While near-term headwinds remain in 2021, we saw improving momentum in awards in late Q4 and are encouraged by the medium-term outlook for our markets," said Chief Executive Robin Watson.
The firm did not recommend a dividend for 2020, and said it will review its payout policy once there is greater clarity over the longer-term impact of Covid-19 and increased end market stability.
Shares in John Wood were down 3.7% at 305.40 pence in London on Tuesday.
By Lucy Heming;Â [email protected]
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