Aberdeen-based Wood Group reports 17% revenue fall
Wood Group, the oilfield services firm based in Aberdeen, has reported half year revenue falling 17%.
The weakness in the oil and gas market has resulted in £2.56bn turnover between January and June, down from £3.07bn at the start of 2015.
Profits fell even faster. Pre-tax profits on continuing operations were down by 39% to £96m.
However, that does not include exceptional items. Post-tax reported profit was down 68% to £44m.
The company has had one-off costs of cutting back sharply on its overhead costs, shedding a 10th of its workforce in the first half of this year.
Wood Group is currently in a pay dispute with maintenance workers on Shell platforms in the UK North Sea.
Chief executive Robin Watson said: "We have continued to focus on what we can control and what we can manage during a period where lower oil prices have endured and activity has fallen.
"Our focus remains on managing costs, improving efficiency and maintaining capability. We are working with our customers to work smarter, streamlining work processes while increasing quality and efficiency."
The engineering firm has told investors it expects full year profits to be 20% lower than in 2015.
The outlook was helped, it said, by early signs of oil production projects being given approval, and signs that the sharp drop in North American onshore drilling may have bottomed out.
Wood Group has also announced a $700m multi-year contract for oilfield automation services in Kazakhstan. This continues work it has been doing there for Tengizchevroil since 2013.
In other energy news, Cairn Energy, based in Edinburgh, announced a significant increase in the estimated size of its oil discovery in Senegal.
An independent company has assessed it as containing 473 million barrels of potentially recoverable oil or its gas equivalent, and up to 2.7 billion in total in the field.
The company said the new North Sea fields in which it has a significant interest, Kraken and Catcher, remain on schedule to be in production by the end of next year. The downturn in the oil market means the capital expenditure behind them has fallen between 10% and 20%.
The Wood Group share price rose 2% in morning trading after its half-year results were announced. Cairn Energy was up nearly 3%.