Annual Report and Accounts 2016

Despite challenging conditions in our core oil & gas market in 2016 the Group delivered financial performance in line with expectations.

John Wood Group PLC
Annual Report and Accounts 2016

Despite challenging conditions in our core oil & gas market in 2016 the Group delivered financial performance in line with expectations. Results benefited from the robust management of utilisation and costs and one off benefits. We enter 2017 as One Wood Group, repositioned to enhance customer delivery and we are encouraged by their support for our services, albeit in a competitive pricing environment. The oil & gas market continues to present challenges and we remain cautious on the near term outlook.

Robin Watson, CEO

Our performance

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Highlights

Financial Summary

Total Revenue1

$4,934m 15.7% (2015: $5,852m)

Total EBITA1

$363m 22.8% (2015: $470m)


EBITA Margin

7.4% 0.6% (2015: 8.0%)

Revenue from continuing operations on an equity accounting basis

$4,121m 17.6% (2015: $5,001m)

Operating Profit before exceptional items

$244m 28.4% (2015: $341m)

Profit for the year

$34.4m 61.8% (2015: $90.1m)

Basic EPS

7.5cents 65.0% (2015: 21.4 cents)

Adjusted diluted EPS

64.1cents 23.7% (2015: 84.0 cents)

Total Dividend

33.3cents per share 10.0% (2015: 30.3 cents)

1 Total Revenue and Total EBITA are presented based on proportionally consolidated numbers, which is the basis used by management to run the business and includes the contribution from joint ventures. A reconciliation to statutory numbers is provided in note 1 to the accounts.

Operational Highlights

Oil & gas markets remained very challenging in 2016; lower oil prices endured and activity fell

EBITA of $363m in line with expectations, down 22.8% on 2015. Adjusted EPS of 64.1c down 23.7%

Despite lower volumes and pricing pressure, impact on EBITA and margin partly offset by:

Robust management of utilisation and decisive action on cost: headcount down 18%, overheads reduced by a further $96m

Commercial contract close outs on significant and legacy projects contributed $29m of EBITA

Balance sheet remains robust: Net debt, including JVs of $331m. Net debt to EBITDA of 0.8x

Proposed dividend up 10% in line with stated intention. Dividend cover of 1.9 times (2015: 2.8 times). Intention is to pursue a progressive dividend policy from 2017, taking into account cash flows and earnings

Exceptional costs of $140m net of tax include $89m in respect of further impairment and restructuring of EthosEnergy and charges in respect of reorganisation, delayering and back office rationalisation in our core business

Oil & gas market continues to present challenges in 2017. Modest recovery anticipated only in selected areas such as US onshore and greenfield offshore projects

One Wood Group reorganisation together with sustainable overhead savings position the Group well for the longer term