Wood Group profits plummet 63% to £34.6m amid falling oil prices

A North Sea oil platform. Picture: Danny Lawson/PA Wire

A North Sea oil platform. Picture: Danny Lawson/PA Wire - Credit: PA

Oil services company Wood Group has seen profits slump as the falling price of crude continues to hit producers and explorers.

The Aberdeen-based firm said profit for the first half of the year was down 63.2% to $44.6m (£34.6m), flagging a 'challenging oil and gas market'. Turnover fell 16.6% to $2.6bn (£2bn), with boss Robin Watson expected to step up cost-cutting measures.

Wood Group has delivered $148m (£114.7m) of cost savings in 2015 and a further $50m (£38.7m) in the six months to the end of June.

Mr Watson said: 'Performance in the first half of 2016 reflects the balance of a challenging oil and gas market, our continued focus on utilisation and cost management, and the benefits of our flexible, asset light model.

'Looking further ahead, we see early indications of modest recovery in some areas and believe our customer relationships, geographic footprint, strong financial footing and relentless focus on delivering value through our asset life cycle services and specialist technical solutions, position us well.'

The company also said it is working to resolve an industrial dispute with workers who have participated in strike action in the North Sea.

'Some of our employees have engaged in industrial action on our Shell contract and we are focused on resolving the dispute consistent with the overarching requirement to have a reduced sustainable cost base moving forward,' it said.

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