Wood Group aims to meet growth target despite turbine delays

LONDON Wed May 15, 2013 8:46am BST

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LONDON (Reuters) - British energy services company John Wood Group (WG.L) said delays in its gas turbines division should subside by the end of the year, allowing the group to meet forecast core profit growth of 15 percent for 2013.

The company, which designs, builds and maintains oil and gas facilities and pipelines, said underlying losses from a difficult project in Oman were narrowing and should lead to improved results on last year, when the project lost $20 million.

Analysts were generally positive but voiced surprise at the sluggish performance in gas turbines.

Wood Group shares fell 2 percent in early trading, compared to a flat FTSE 100 index .FTSE.

The company said the performance of its gas turbines division, Wood Group GTS, was behind schedule due to what it said were delays in engine overhauls, but was expected to recover over the rest of the year.

The engineering division and Wood Group PSN - which offers services to energy projects - were performing in line with expectations, the company said on Wednesday, with growth coming from the North Sea and shale in the United States.

Wood Group said it expected about 15 percent growth in earnings before interest, taxes and amortisation in 2013. European peers such as Norway's Aker Solutions AKSO.OL and Italy's Saipem (SPMI.MI) both issued profit warnings this year.

"The likelihood is that consensus will need to adjust for a weaker first half, but that full-year 2013 forecasts should remain little changed," David Thomas, an analyst at Credit Suisse, said in a note.

(Reporting by Stephen Eisenhammer; editing by Rosalba O'Brien and Tom Pfeiffer)

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