Wood Group continues to forge ahead with its strategic growth strategy via plans to sell its controlling stake in Aberdeen-based Ethos Energy.
The engineering services giant said in a trading update issued this morning that it has started the sales process for its 51% share in the business, which was set up in 2014 in conjunction with Germany's Siemens.
Ethos is an independent services provider specialising in rotating equipment for the power, oil and gas and industrial sectors. It has 4,000 staff globally with offices in Aberdeen, the US, the Middle East and the Asia-Pacific region.
READ MORE: Wood Group hints at further new contract wins to come
Wood's share of revenues from Ethos in 2023 amounted to $30 million (£23.5m), or just 0.005% of total annual revenues which rose by 9% as the company has announce a string of new contract wins in recent months. Much of this has been focused on what it calls "sustainable solutions" which covers a range of projects from renewable energy and hydrogen through to chemicals and liquified natural gas.
It is all part of the three-year turnaround plan unveiled in November 2022 by chief executive Ken Gilmartin, who was in confident form this morning as Wood said it is on tract to deliver positive cash flow in 2024.
“Our ambition for the coming year is continued growth," he said. "Our order book is up year-on-year, which says we’ve got a strong position to continue to grow. Our strategy was always based on that organic growth, continuing to provide those really high-end solutions to our clients.
"We are going to continue to grow in energy transition, we are going to continue to grow in energy security, we are going to continue to grow in our chemicals business, and in our consulting business, we are going to continue to see growth there.”
“The other piece is this is going to parlay into a better cash performance as we go through the cycle, so 2024 [will see] positive free cash flow, and then significant positive free cash flow in 2025.”
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