(Reuters) - Oilfield services company John Wood Group Plc reported an 86.7 percent fall in half-year profit, due to an exceptional charge and as weak oil prices hurt demand for its services.
Wood Group, like its rivals, has seen muted demand for its services after oil producers cut their budgets in a weak crude price environment.
Though globally-traded Brent crude rose about 28 percent, it still hovers around $50 a barrel, well below the peak of $115.06 touched in mid-2014.
The company, which is taking over smaller rival Amec Foster Wheeler Plc, avoided an in-depth investigation by UK’s market regulator earlier this month by proposing a sale of Amec’s North Sea operations.
The company, founded in 1912 as a ship repair and marine engineering firm, said should the remedy proposed by the Competition and Markets Authority be accepted and implemented, pretax synergies of about 25 million pounds would not be achieved.
Profit fell to 6 million pounds for the year ended June 30 from 45 million pounds last year, impacted by exceptional costs of $47.6 million, including a $25.2 million charge related to the Amec Foster deal.
Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Sunil Nair