Aberdeen engineering heavyweight to create 300 jobs as North Sea activity increases

Ken Gilmartin
Ken Gilmartin

WOOD has said it expects oil and gas to remain a core business as it targets growth in low carbon energy markets and plans to increase North Sea workforce numbers by 300 amid increased activity in the area.

However, the Aberdeen-based engineering giant saw its shares plunge around 15 per cent yesterday after the company indicated that profits will be lower than expected next year and that shareholders may face a wait for payouts.

The news came in an update that Wood issued to outline the “refreshed” strategy that new chief executive Ken Gilmartin has decided the company should pursue.

After succeeding Robin Watson in July, Mr Gilmartin said that Wood had clear strengths and an exciting future ahead but had not delivered value for its shareholders over the last few years.

Yesterday he said: “We are now taking a more focused approach to growth, targeting specific priority markets across energy and materials that best match our competitive strengths.”

Mr Gilmartin said Wood is focused on some large markets with solid growth potential, citing the oil and gas business in which it made its name, and chemicals.

In August Mr Gilmartin said clients had been reassessing North Sea assets including their longevity, amid the surge in oil and gas prices fuelled by the war in Ukraine.

A spokesperson for Wood said yesterday the group expects to increase North Sea workforce numbers by around 300, from 2,300, amid increased oil and gas activity.

Mr Gilmartin said Wood will also target smaller markets with substantial growth potential, including hydrogen and carbon capture.

The recent sale of its built environment business generated $1.7 billion to help Wood cut debt.

Current year trading has been in line with analysts’ expectations. Wood said it expects profit margins to be flat in the near term as it invests in growth. The company does not expect to be generating free cash flow until 2024.

Analysts at Morgan Stanley said the margin comment suggested 2023 earnings could be around $404m against expectations of $442m. They said Wood was unlikely to consider making payouts to investors before becoming cash flow positive. It last paid a dividend in 2019. Wood shares closed down 24.65p at 134.75p.

 

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