Amec Foster Wheeler (AMFW) posted adjusted trading profits of £188m for the first six months of the year. That represents a £55m or 24 per cent decline from the 2014 half-year figure, which was boosted by a £20m one-off licensing settlement fee.
Exposure to the upstream oil and gas industry has weighed on group margins ever since Amec finally secured a controlling interest in global engineering rival Foster Wheeler at the tail-end of 2014. Conditions for oil and gas companies are expected to remain challenging throughout the remainder of this year and beyond, but the newly integrated entity is confident it can meet full-year revenue expectations.
Other areas of the business, such as petrochemical engineering and US solar, have proved resilient in the face of the commodities downturn. The clean energy segment should eventually provide better earnings visibility through its support work for the next generation of nuclear reactors in the UK, though it will generate slightly lower full-year revenues than in 2014 due to project delays.
Separately, Amec announced the award of a three-year integrated services contract by a subsidiary of the Danish shipping and energy conglomerate Maersk Group.
JPMorgan Cazenove expects adjusted EPS of 70.1p for the full year, against 74.3p in 2014.
| AMEC FOSTER WHEELER (AMFW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 762p | MARKET VALUE: | £3.0bn | |
| TOUCH: | 761-763p | 12-MONTH HIGH: | 1,150p | LOW: 689p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 446p* | NET DEBT: | 55% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 1.86 | 83.0 | 20.2 | 14.8 |
| 2015 | 2.66 | 73.0 | 14.7 | 14.8 |
| % change | +43 | -12 | -27 | - |
Ex-div: 26 Nov Payment: 5 Jan *Includes intangible assets of £3.1bn, or 801p a share. | ||||
