NORTH Sea oil services giant Amec Foster Wheeler has posted a 135 per cent increase in annual losses highlighting the challenges faced by the company which Aberdeen’s Wood Group is set to buy for £2.2 billion.
London-based Amec Foster Wheeler lost £542m before tax in the year to December amid tough times in its core oil and gas markets, against £235m in the preceding year.
The company noted clients in the USA delayed or cancelled a number of contracts in response to the fall in oil and gas prices.
The company said activity increased in the North Sea but this reflected the fact some big projects are nearing completion.
Chief executive Jon Lewis warned: “We continue to expect another year of decline in oil and gas activity in 2017.”
Sector watchers have noted that pressure on workloads could increase in the North Sea in coming months as big developments which were commissioned during the boom that ended in 2014 are finished.
The increase in losses at Amec Foster Wheeler was partly driven by a £200m charge to reflect a cut in the valuation of the Foster Wheeler business that Amec acquired for £2bn in 2014.
The group said it recorded the impairment charge because of uncertainty about future prospects for the US oil and gas business run out of Houston, following a significant deterioration in trading conditions in the first half.
The statement may raise questions about Wood’s decision to make its £2.2bn all-share bid for AFW in March. This has
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