LONDON (Reuters) - Babcock International (BAB.L) nudged down its guidance for annual underlying operating profit and wrote down the value of its oil and gas transportation business in the latest blow to the British engineer.
One week after the company announced the retirement of Chief Executive Archie Bethel, Babcock said it would also embark on an improvement and restructuring programme to ensure it remains on track for medium term targets.
It will write down the value of assets in its oil and gas division, which transports around 260,000 men and women to platforms in the UK’s North Sea, leading to an exceptional charge of around 85 million pounds.
The company said it had been hit by delays in the award of new contracts for aerial emergency services in Italy and Spain. In the oil and gas division, three large competitors have emerged from bankruptcy protection with reduced debts and written-down assets.
That has enabled them to reset global market pricing levels, Babcock said.
The company, which also operates in defence and civil nuclear markets, said its forecasts for underlying revenue, cash flow and earnings per share remained in line with expectations.
Reporting by Kate Holton; editing by Sarah Young