SCOTTISH engineering giant Woood has seen its shares plunge around six per cent after the company said the year has started more slowly than expected.

Aberdeen-based Wood saw operating profits fall around 50 per cent last year as the fallout from the coronavirus took a toll on activity in key markets such as the North Sea oil services sector.

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When Wood announced its annual results in March the company said it was braced for conditions to remain tough with lower activity levels expected.

While crude prices have increased along with the rollout of coronavirus vaccines, the outlook for markets such as oil and gas remains uncertain.

Yesterday Wood chief executive Robin Watson said the firm’s order book had improved in recent months but told its annual general meeting: “The year has started slower than anticipated.”

Wood did not provide details of the performance of the North Sea oil services business but indicated that spending on the kind of new oil and gas developments it helps clients to complete is under pressure globally.

The company said it expected new awards in the conventional energy market to be limited to smaller, early stage scoping work in the current year.

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This will be offset by increased demand for operations support. Some firms are looking to increase the efficiency of operations in response to the challenges posed by turbulence in oil and gas markets.

Wood noted it was recently awarded a five-year integrated facilities services agreement with TAQA in the North Sea.

Wood has been able to limit the impact of the oil and gas downturn on its revenues by winning work in other markets.

Mr Watson has moved to reduce Wood’s reliance on the oil services business in which it made its name.

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Wood has recently won contracts to work on a hydrothermal recycling facility in north east England and a giant onshore windfarm in Sweden.

Mr Watson said: “Margins have remained relatively robust, benefitting from efficiency initiatives and improved project execution largely offsetting the impact of lower activity.” Wood’s outlook for 2021 overall is unchanged.

Wood has around 3,500 employees working in or offshore Scotland, down from 4,000 in April last year.

Shares in the firm closed down 18p at 267.2p.