The group, which employs over 40,000 people in more than 55 countries, reported half year pre-tax profits which fell by 12% to £73 million. Trading profit for its Americas business fell by 32% impacted by pricing pressure in Oil & Gas, while profits also retreated by 63% for its Global Power business, with revenues hit by a decline in project activity.
More positively, trading profit for its Northern Europe & CIS (NECIS) business rose by 6% to £70 million, aided by favourable contract settlements and cost savings, whilst the integration of AMEC and Foster Wheeler remains on track. Management plans to deliver $125 million of cost savings from the integration by 2017. The Chief Executive noted that "In the challenging conditions we find in many of our markets our priorities are clear: to make the most of the integrated Amec Foster Wheeler platform, innovate and adapt to offer customers relevant services and continue to keep a tight control on our own costs."
- Adjusted or scope revenues fell by 4% to £2.58 billion compared to H1 2014.
- Pre-tax profits fell by 12% to £73 million.
- The dividend payment remained unchanged at 14.8 pence per share.
Management noted that "Our expectations for the group's full year results remain consistent with previous guidance. We expect to see challenging market conditions continue - particularly in upstream Oil & Gas and Mining. Downstream Oil & Gas, particularly petrochemicals, continues to be resilient. Clean Energy E&C scope revenue is likely to be lower than in 2014, due to delays to the start of work for significant projects in our order book. Our strong pipeline also gives us confidence that we will see further progression in the order book from its current level of £6.6 billion."
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.