Wood Group signals profits drop

Wood Group operates in more than 50 countries worldwide

Energy services provider Wood Group has signalled that profits will be lower this year in the face of "challenging" market conditions.

The group said it expected earnings this year before interest and tax (EBITA) to be about 20% down on 2015.

It blamed continuing pressures on margins as a result of "expected lower activity" by oil and gas firms.

The Aberdeen-based firm said its profit expectations for the year were "in line with current analyst consensus expectations" of about $377m (£261m).

In a statement, Wood said: "Year to date financial performance, although down on 2015, continues to benefit from the breadth of our offering, our focus on management of utilisation in response to demand, and structural overhead cost savings."

It added: "Our continued focus on reducing costs, improving efficiency and broadening our service offering through organic initiatives and strategic acquisitions, positions us as a strong and balanced business in both the current environment and for when market conditions recover.

"A trading update for the first half of the year will be provided on 30 June 2016."

Wood recently announced a series of major contract wins, including two new contracts in Iraq worth a combined $140m, and a $500m deal to provide services for BP-operated offshore projects in Azerbaijan.

The group operates in more than 50 countries. Its three businesses - Wood Group PSN, Wood Group Kenny and Wood Group Mustang - provide a range of engineering, production support and maintenance management services to the oil and gas and power generation industries.