John Wood Group PLC, an engineering and consulting firm in the oil and gas sector, has reported mixed results for the third quarter of 2024.
The company saw overall revenue growth of 1 per cent to US$1.48 billion compared to the same period last year, driven by strong performance in its operations segment.
Wood Group CEO Ken Gilmartin highlighted the company’s ongoing turnaround efforts, stating: “We continue to make progress on our turnaround, building a simpler, higher quality Wood.”
He noted that the company’s simplification program is on track to deliver annualised savings of approximately US$60 million.
Wood Group’s operations segment, which includes maintenance and operations services for oil and gas facilities, showed robust growth with a 9 per cent increase in Q3 revenue to $652 million.
This growth was attributed to higher activity levels, particularly in Europe and the Middle East.
However, the company faced challenges in its projects business, with revenue declining 2 per cent to US$584 million in Q3.
This decrease was partly due to Wood Group’s strategic shift away from large-scale EPC (Engineering, Procurement, and Construction) work, as well as ongoing weakness in minerals, life sciences, and chemicals sectors.
Despite the mixed performance, Wood Group secured several significant contracts in the oil and gas sector during the period. Notable wins included a six-year contract with Shell for the world’s largest floating offshore LNG facility in Australia and a major engineering contract with Saudi Aramco for gas facilities in Saudi Arabia.
The company’s order book stood at US$5.4 billion as of September 30, 2024, down 8 per cent compared to the previous year.
Wood Group maintained its full-year guidance, expecting high single-digit growth in adjusted EBITDA before the impact of disposals.
The company also anticipates net debt (excluding leases) at the end of 2024 to be similar to the US$694 million reported at the end of 2023.
As the oil and gas industry continues to navigate challenges and opportunities in the energy transition, Wood Group’s performance reflects the sector’s ongoing evolution and the company’s efforts to adapt to changing market dynamics.
