Troubled Aberdeen energy firm Wood has started the new year on a positive note after an annus horribilis in 2024.
The company said the previously announced sale of its stake in Ethos Energy Group Limited has completed. The disposal will mean a cash boost of £110 million.
Wood owned 51% of the Ethos Energy joint venture which focused on rotating equipment, with Siemens Energy AG holding the minority stake.
Established in 2014, Ethos Energy is also based in Aberdeen and employs around 3,600 people globally.
Wood announced its plans to sell its stake to private equity firm One Equity Partners in August. The deal completed on December 31 and was announced to the stock market on Thursday morning.
Difficult year for Wood
Wood suffered a series of setbacks in 2024.
In February it confirmed it was looking to cut 22 “corporate function” jobs in Aberdeen.
Then, in August, the group saw a collapse in its share price as Sidara walked away from a proposed takeover deal.
Wood shares fell from almost £2 a share to just £1.21, wiping around £450m off the value of the company.
But more bad news was to come. Later in August, Wood announced its half-year results, which showed a decline in turnover and a £756m loss.
The losses were mainly due to exceptional charges of £743m, including a £626m impairment charge and a £107m loss to exit contracts.
November’s trading update contained another warning which spooked investors and saw Wood shares lose more than half their value.
It said it had instructed an independent review of its books be carried out. Deloitte will look at “reported positions on contracts in projects, accounting, governance and controls, including whether any prior year restatement may be required.”
Wood shares closed below 50p for the first time in the company’s history.
Since November, there has been a small recovery in the share price. With news of the completion of the Ethos Energy deal, shares were up around 3% this morning at 67p.
Selling joint venture helps to simplify Wood business
Ethos Energy contributed £27m of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to Wood’s results in 2023.
The deal with One Equity Partners includes £33.6m of previously planned loan notes replaced by an additional cash consideration.
Ken Gilmartin, chief executive of Wood, said: “We are pleased to complete the sale of Ethos Energy to One Equity Partners.
“This strategic divestment is part of our strategy to be selective and focused on our core business.
“We will continue to align our portfolio as part of our commitment to simplify Wood.”
Mr Gilmartin said Wood’s simplification programme will deliver annual savings of more than £40m.
Wood’s full-year outlook for 2024 remains positive, with “high single-digit growth” helped by an expected strong performance in the fourth quarter.
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