- Shares down 70% over the past year
- Expects negative free cash flow in 2025
- Deloitte review into firm continues
Shares in John Wood Group (WG.) plummeted 30% in early morning trading as the Scottish-based oil and gas engineering and services firm reported weaker-than-expected trading in the fourth quarter.
John Wood said it has taken actions to mitigate fourth quarter weakness by cancelling executive and employee bonuses and ‘actively managing working capital at year end.’
However, the firm still expects negative free cash flow of $150 million to $200 million in 2025.
The company is expecting to deliver full year 2024 EBITDA (earnings before interest, tax, depreciation, and amortisation) of between $450 million to $460 million.
The tone of the full year trading update to 31 December doesn’t bode well for investors who have seen the shares fall a staggering 71% over the past year.
WHAT DID THE CEO SAY?
Chief executive Ken Gilmartin said: ‘While we have made progress, I am disappointed in our financial performance. Consequently, we are taking decisive actions to ensure we can meet the opportunities we have in growing markets, principally energy.
‘While the likely findings from the independent review are expected to have no material impact on the group's cash position and future cash generation, it clearly gives us areas to focus on and we are initiating steps now to further improve our financial culture, governance, and controls.
‘We have announced further actions to address the cost base of the business to right size Wood for the future and have laid out a very clear route to positive free cash flow in 2026.’
NOT ALL BAD NEWS
The firm delivered some positive news regarding further cost savings – a programme launched in March last year is on track to deliver annualised savings of circa $60 million in full year 2025.
John Wood also said its order book has increased to circa $6.2 billion as of 31 December 2024, significantly improved on circa $5.4 billion as of 30 September 2024.
