Wood Group, which provides oil services, reports losses of 900 million dollars

John Wood Group has reported a shocking first-half loss, just a fortnight after a suitor abandoned a takeover bid.

The oil services business posted an operating loss of $899m (£691m) for the six months ended June, compared with a profit of $23m a year earlier.

FTSE 250-listed Wood Group recorded exceptional charges of $966 million, including an $815 million goodwill impairment from legacy acquisitions and higher discount rates caused by increased market volatility and debt servicing costs.

Another $140 million was recorded in charges related to the company’s decision to withdraw from large-scale, lump-sum turnkey engineering, procurement and construction work.

However, Wood Group has maintained its full-year guidance, with adjusted pre-event earnings – before the impact of divestments – expected to grow by a high single-digit percentage this year.

Its order book also rose 3.6 percent to $6.2 billion, thanks to new contracts won by its trading and investment services divisions.

The former recently won a $46 million contract from TotalEnergies for flare gas recovery services in Iraq and the North Sea and a six-year deal from Shell to work on a major offshore liquefied natural gas facility in Australia.

Ken Gilmartin, Wood Group chief executive, said: “As we look ahead, we remain confident that our strategy, the actions we are taking and the growth potential in our markets will deliver significant value for our shareholders.

‘We are pleased to reconfirm today our outlook for both 2024 and 2025, including the generation of significant free cash flow in 2025.’

Dubai-based engineering firm Sidara pulled out of a £1.6bn takeover bid by Wood Group on 5 August, citing “rising geopolitical risks and financial market uncertainty”.

Wood Group incurred costs of around $6 million from the failed bid and expects to accrue around $5 million more in the second half of the year, but will be reimbursed for some costs by Sidara.

The Edinburgh-based company was also the subject of a takeover bid by private equity giant Apollo Global Management last year.

Apollo made five bids for Wood Group, with the latest valuing the company at £1.7bn, before pulling out in May 2023 without giving any explanation.

Adam Vettese, market analyst at eToro, said: “Question marks will remain after another failed bid as shareholders look for the opportunity to capture additional returns that have been squandered once again.”

John Wood Group shares rose 0.2 percent to 132.8 pence and have lost around 21 percent of their value since the start of the year.