Wood Group shares ticked higher on Tuesday after releasing an upbeat first half-year report that reflects favourable trading conditions.
Revenue rose 16% to $3bn and adjusted EBITDA rose 8.5% to $202m. Wood Group enjoyed growth across all business units including their sustainable business which saw revenue jump 20%.
The strong performance in the first half of the year gave Wood Group the confidence to increase their guidance for EBITDA and profit for the full year.
“After a bid from private equity firm Apollo collapsed earlier this year Wood Group has been under pressure to deliver, and these results go some way towards doing that as it pulls the rabbit of slightly improved full year guidance out of its hat,” said AJ Bell investment director Russ Mould.
“The energy services firm has endured a difficult few years after the 2017 acquisition of Amec Foster Wheeler brought with it a whole deal of problems which the company is still addressing. These continue to act as a drag on cash flow although the situation is starting to improve.
“The main driver of the better first half performance was tight control of costs, no mean feat given how volatile the backdrop has been. Wood Group, which is a big provider of services to North Sea oil and gas firms, has a longer-term challenge of adapting to the energy transition.
“Get it right and there could be big opportunities for the company to help its client base through this process, but it needs to put its legacy problems behind it first.”