May 11 (UPI) — The team up with energy services company Amec Foster Wheeler is expected to yield significant benefits in the year ahead, British firm Wood Group said.
Wood Group announced plans in March 2017 to purchase the company for $2.6 billion in a move that combined two of Britain’s largest energy services companies. Amec Foster Wheeler said it would sell off parts of its exploration and production business in anticipation of concerns from the British Competition and Markets Authority.
Robin Watson, the chief executive officer for Wood Group, said at the company’s annual meeting Friday that combining with its counterpart has already demonstrated significant benefits.
“Our overall outlook is unchanged and we are confident of returning to growth in 2018,” he said in a statement.
The acquisition of Amec Foster Wheeler was completed in October. For the year ending Dec. 31, Wood Group reported total revenue jumped 25 percent year-over-year to $6.1 billion. Operating profit before exceptional items, meanwhile, dropped 13 percent to $212 million.
Earnings before interest, taxes and amortization, a gauge of the company’s profitability, are expected to be in a range between $619 million and $643 million.
“We are confident of delivering EBITA in line with guidance and market expectations,” Watson said.
Wood Group in 2016 cut about 35 percent of its payroll and drew down overhead costs by $96 million. By June, the company said it was still facing headwinds in its core oil and gas market, with only modest recovery elsewhere.
The company said Friday its performance during the first quarter was led in part by U.S. shale, where production is accelerating.
“In U.S. shale, we are seeing an improvement in maintenance activity as expected,” its statement read.
Services companies have been joining forces since the market downturn bottomed out two years ago. Subsea 7 and Schlumberger, the largest services firm in the world, formed a joint venture partnership in February that was based on a 2015 arrangement to coordinate broad offshore development work under one umbrella.