Amec Foster's First-Half Trading Profit Falls, Margins Improve

Reuters

Aug 10 (Reuters) - British oil services company Amec Foster Wheeler Plc, which is being bought by John Wood Group Plc, reported an 8 percent fall in half-year profit, but stronger margins helped to boost its shares.

The company reported an 80 basis-point rise in trading margins for the period to 7 percent, beating Jefferies estimates. Its oil and gas unit reported a 250 basis-point margin rise to 8.4 percent.

Underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 7.6 was about 120 basis points ahead of consensus, Bernstein analysts said in a note.

Amec's shares rose as much as 2.7 percent.

Amec has outperformed its London-listed peers and the wider STOXX Oil and Gas index this year, Reuters data showed. (http://bit.ly/2urvk2G)

Oil producers generally have had to cut costs and delay projects during a more-than two year rout in oil prices which has hurt demand for equipments and services.

Benchmark Brent crude prices averaged $52.71 per barrel in the first half of the year compared with an average of $41.18 a year earlier.

Amec has looked to capitalise on a rise in demand for offshore and shale oil rigs in the United States.

Britain's Competition and Markets Authority said earlier this month that Wood Group's plan to purchase Amec could lead to competition concerns in the supply of engineering and construction services and operation and maintenance services on the UK continental shelf.

Amec said it was preparing its UK North Sea operations for sale, adding that a competitive process was already underway, in response to the competition watchdog's concerns.

Total order book value for the company stood at 5.6 billion pounds ($7.27 billion) in the first half, compared with 6.2 billion pounds a year earlier. Its oil, gas and chemicals unit's order book fell 3 percent to 2.9 billion pounds.

Amec reported a trading profit of 162 million pounds ($210.2 million) for the first half ended June 30. Revenue fell 18 percent to 2.33 billion pounds in the period.

($1 = 0.7705 pounds)

(Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Gopakumar Warrier and Jane Merriman)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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