WOOD Group’s interim results show just how tough life is for companies in the oil services sector as the firms they work for slash spending on fields in response to the steep fall in oil prices since 2014.
The chief executive of the Aberdeen-based engineering firm, Robin Watson, noted the pain is being felt in oil and gas regions across the world.
However, he made clear that conditions are particularly tough in the North Sea, which is seen as a high cost area.
While Wood Group welcomed early indications of modest recovery in some overseas markets, Mr Watson said there had been no signs of an upturn in the North Sea.
He is confident, however, that activity levels will pick up at some point in the future in the area and that Wood Group will be well placed to benefit.
The company has retained a blue chip client list in the North Sea amid the downturn, although it has had to accept cuts in prices to retain at least some contracts.
Mr Watson said Wood Group had had some tough conversations about volumes and margins with firms that operate oil and gas fields but clients had behaved fairly.
The consequences have been felt by legions of employees and contractors working for Wood Group, which has shed thousands of jobs and cut or frozen pay rates.
Mt Watson stressed the impact has been felt at all levels of the company.
But Wood stressed that its balance sheet is strong enough to cope with continued tough times.
The group's decision to increase the interim dividend by ten per cent looks to have been intended to signal confidence and to keep investors onside.
However, it is likely to raise questions in some quarters about whether the pain of the downturn is being felt by all stakeholders in Wood Group.
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