Contractors post results

Amec Foster Wheeler announced on Tuesday that its losses had more than doubled last year, while US competitor McDermott reported a strong Q1.

Amec Foster Wheeler, which is in the process of being acquired by Wood Group for some GBP 2.23 billion, said it had lost some GBP 542 million in 2016 before tax, compared to a loss of GBP 235 million in 2015. The company’s total revenues were almost unchanged, at GBP 5.44 billion last year.

“Given conditions in natural resources end markets, our 2016 trading performance was robust, as we benefited from the breadth of our business – especially the record performance from solar – cost saving actions and the fall in sterling in the second half of the year,” CEO Jon Lewis said in a statement.

“We continue to expect another year of decline in oil and gas activity in 2017 and for solar activity to reduce significantly from the record levels seen in 2016.”

Amid continued pain for the sector, a number of companies have pursued consolidation, with Canada’s SNC-Lavalin signing an agreement to acquire WS Atkins days ago. In 2014, SNC-Lavalin acquired Kentz Corporation in a bid to bolster its oil and gas activities. That same year, Amec bought Foster Wheeler.

While rival McDermott posted a lower year-on-year revenues in Q1 it overturned a net loss to a net profit this year. The company made USD 21.9 million on USD 520 million in revenues in Q1 2017, up from a loss of USD 2.2 million on USD 729 million in revenues during the same period last year.

“Excellent project execution and customer alignment led to cost savings, better than anticipated closeouts and customer driven change orders, driving McDermott’s profitability,” said CEO David Dickson in a statement.