Saudi Aramco deals fuel loss-hit Wood's bullish 2019 outlook
UK company braces for positive year in Middle East as Kuwait revenue grows by 200%, and Saudi earnings rise by 87%
UK-headquartered loss-making engineering company Wood Group is optimistic it can deliver financial results in the Middle East after revenue from Saudi Arabia and Kuwait increased significantly in 2018.
Its strong performance in the kingdom came after it secured an engineering, procurement, construction, and commissioning contract with Saudi Aramco and Sabic, as well as a project management package to develop Aramco’s Marjan oilfield.
These wins helped to bolster the $84.7m in revenue the company generated in Saudi Arabia, up 87.2% year-on-year.
Kuwait, meanwhile, performed even better, and Wood Group saw its continuing revenue in the Arab country increase by 200.2% to $339.9m.
The strong performance in Kuwait and Saudi Arabia helped the UK-based engineering group narrow its 2018 loss to $7.6m.
Wood Group’s chief executive officer, Robin Watson, commended his team for delivering “good organic growth” during the financial year in the company’s annual report.
With a team of more than 60,000 people spread across 60 countries, Watson said he was confident that Wood Group would “achieve further growth in 2019” after reducing debt and completing the integration of London-headquartered engineering consultancy Amec Foster Wheeler.
Wood Group will continue to deleverage the business this year and said in its annual report that it is in a good position to deliver growth, thanks to its order book worth $10.3bn.
Kuwait, Saudi Arabia, and its ongoing work with Texas oil giant Exxon Mobil in Iraq are expected to contribute to the financial uplift of the loss-making contractor that has been in the building industry for more than 160 years.
A contract award from Abu Dhabi's Adnoc is likely to support this growth.
The company is primarily operational in the oil and gas sector, which accounts for 47% of its work. Power and industrial projects account for just under a third of its projects, with environmental and infrastructure projects third with 13%, its 2018 financial report shows. Minerals processing and automation both account for 4% of its sectoral activity.