Wood Group: Firm offloads two businesses as ‘strategic’ turnaround begins
Engineer Wood Group has sold two businesses for a total of $165m (£125m) after it revealed it slid into the red in the first half of the year.
The London-listed firm, which is headquartered in Aberdeen, said today it has sold its stake in Ethos Energy Group, a joint venture with its partner, Siemens Energy AG, and its share in CEC Controls Company, which specialises in industrial and process control systems for the automotive industry.
The firm added that it had agreed, with Siemens, to sell Ethos to private equity firm One Equity Partners.
The sales followed the release of Wood’s first half results last week. The figures showed revenue had dipped by 4.8 per cent in the six months to 30 June, from $3bn (£2.3bn) in 2023 to $2.8bn (£2.2bn).
The company also suffered a loss of $899m (£691m) during the period, having announced a profit of $23m (£17.7m) in the same period the previous year.
But it maintained its full year guidance for both 2024 and 2025, attributing its dip into the red to writing off a $140m (£107.8m) exceptional charge.
Wood Group said Ethos Energy and CEC Controls Company contributed $41m (£31m) to adjusted earnings before interest, tax, deprecation and amortisation (EBITDA) in 2023.
The firm said it expected to receive about $125m (£94m) in cash from the sales once they were completed, which it anticipated would be later in 2024.
Additionally, Wood said it would receive loan notes from Ethos Energy that, when repaid in around five years, could bring in up to $42m (£32m) more, plus interest.
Jennifer Richmond, Wood’s chief strategy officer, said: “The sale of these two non-core businesses is further evidence of progress of our strategy.
“We continue to review Wood’s portfolio in line with our strategic priorities to be selective in our markets and capabilities and steadfast in our commitment to simplify Wood and deliver greater cash flexibility.
“There is a strong strategic fit between both these companies and their buyers, and we are confident both businesses will thrive under new ownership.”