Engineering firm says oil & gas exploration and production spend set to rise well into next year
JOHN Wood Group has posted a 49 per cent jump in first half profits thanks to strong global growth.
The Aberdeen-based engineering firm said its £600 million acquisition of PSN and the sale of the well support arm to General Electric had served to reinforce its "world leading" market position.
Around half of the $2.8 billion (£1.75 billion) raised from the sale of the well support arm to General Electric was given back to shareholders.
The group said first half profits rose to $102.4 million (£62.1 million) from $68.8 million (£41.7 million).
Total revenues in the first half increased 17 per cent to $2.83 billion (£1.71 billion) from $2.41 billion (£1.46billion).
Chairman Sir Ian Wood said: "The first half of 2011 has been a period of exciting change for the group as we completed our strategic repositioning to focus on world leading positions in engineering, production facilities support and gas turbine services."
Wood Group, which employs 35,000 people in the oil and gas and power generation sectors, said market conditions are improving and predicts exploration and production spend will rise in 2011 and 2012.
The group's production arm generated more than half (54 per cent) of its total revenues from the North Sea last year with long term contracts from the likes of Shell and BP.
The PSN acquisition, which prior to a 2006 Bank of Scotland backed management buyout was a division of US oil services firm Halliburton, has opened up new territories for Wood Group in North America.
PSN's operations in the Caspian and Russia will also help to reduce dependence on UK work as well as bringing in higher margin work, the group said.
The division, which provides field support to oil and gas producing assets, saw underlying earnings grow by a third in the half-year to $65.1 million (£39.5 million).
In engineering services, including subsea and pipeline work, earnings rose 25 per cent to $72.5 million (£44 million).
Wood Group shares have risen by almost 50 per cent in the past year, and rose more than four per cent in early trading today.
The group announced today it was raising its half-year dividend by 15 per cent.