The boss of engineering and consultancy services giant Wood has said there is “positive momentum” for an end to strikes that have disrupted oil and gas operations in the North Sea this year.
Ken Gilmartin, chief executive of Aberdeen-based Wood, highlighted ongoing “dialogue” between workers, their union representatives and offshore contractors.
He added: “I think what’s important has been the dialogue… the continued kind of conversations we are having… that our clients are having, that the unions are having as well.
“We’re starting to see some of them resolve… and there’s positive momentum.
“We are starting to get some agreements over the line.”
A wave of strikes, some involving employees of Wood, has hit the North Sea this year.
Wood’s first half revenue up 18%, earnings higher by 10%
Mr Gilmartin was speaking shortly after Wood updated the market on its first half trading performance.
He told The Press and Journal the company was hitting targets and meeting its commitments on every level.
Wood’s 18% jump in revenue and 10% growth in adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) – both year-on-year and on a constant currency basis – to about £2.2 billion and £149.3 million respectively, are the the result of a “winning” strategy, he said.
We’re in the right markets in the right way at the right time.”
Ken Gilmartin, CEO, Wood.
Headcount across Wood’s global operations is up 5% year-on-year, to around 35,600.
The Aberdeen workforce has increased by 2.5% over the past year, from 1,414 to 1,450.
“We’re growing, we’re winning,” Mr Gilmartin said, adding: “These results show the centre strategy is working. We’re in the right markets in the right way at the right time.
“The other bit that’s really important in our story is that we’re going to be generating cash in the second half of this year. That’s a great data point for us to really continue to grow on.”
Wood’s CEO was unfazed by the company’s net debt rising to nearly £500m, as of the end of June, from about £300m at the end of last year.
This was partly due to a large tax liability from the £1.37bn sale of the group’s built environment consultancy arm last year, he said, adding the increase was “anticipated”.
Mr Gilmartin continued: “As we move into the second half of the year and start to see positive free cash flow, then you will also start to see… that net debt figure coming down.”
£38m contract in US life sciences sector among Wood’s first deals
Big deals for the firm during the first half of 2023 include a £190m-plus contract extension with a “major” energy producer in south-east Asia for
operations and brownfield engineering services.
Wood also highlighted a large minerals contract in Europe and a £38m engineering services deal in the US life sciences industry, with global pharmaceuticals giant GSK.
Mr Gilmartin said more than one-third of Wood’s bidding pipeline involved “sustainable solutions”, highlighting the growing appeal of green projects for the firm.
Wood has faced criticism from climate campaigners in recent months over the pace of its transition from projects supporting oil and gas extraction into greener activities.
Extinction Rebellion activists protested outside Wood’s offices in Aberdeen and Staines.
They were particularly incensed over a “green future loan” – worth £430m – that was awarded to the company under the UK Export Finance “guarantee”, aimed at helping exporters through the “energy transition” and creating green jobs around Britain.
Much of the cash has been repaid but the Guardian newspaper recently claimed Wood’s oil and gas business had grown, with work in renewables reducing, since the 2021 loan.
What did Mr Gilmartin have to say about the firm’s green credentials?
Mr Gilmartin told the P&J the built environment consultancy sale to WSP Global prompted a review of a climate change transition plan the company signed up for.
“That’s where we are at the moment”, he said, adding the London-listed firm had “executed on” everything that was agreed under the original climate transition plan.
As of June 30, Wood’s order book was worth about £4.6bn – up 3% from last year on a constant currency basis.
Shares in Wood rose slightly after it also said full-year trading is likely to be in line with its medium-term financial target of mid to high single-digit growth in adjusted Ebitda.