Wood Group upbeat as oil explorers raise dividends

LONDON: British energy services firm John Wood Group raised its interim dividend and gave an upbeat outlook on 2011, with its oil exploration customers expected to increase their spending.

Earnings before interest, tax and amortisation (EBITA) was $192 million in the six months to June 30, the company said on Tuesday, up 25 percent from a year ago.

Sales rose 17 percent to $2.8 billion.

Wood Group, which builds oil and gas facilities, constructs pipelines and whose equipment is used in shale gas drilling, said it continued to see good momentum despite the recent market volatility.

"The longer term fundamentals for oil and gas development and production, and gas fired power generation remain strong. Reflecting continuing confidence in our longer term outlook, we have declared a 15 percent increase in the interim dividend," it said.

The company, which in May said it would return $1.7 billion to shareholders following the disposal of its well support unit, said it planned to pay an interim dividend of 3.9 cents.

Wood Group has reshaped itself with the well support disposal and by buying PSN to expand its production facilities business over the last 12 months, and said it expected its full year performance to be in line with expectations.

Wood, whose customers include BP and Royal Dutch Shell, said market conditions continued to improve. Its positive sector outlook echoed that of oil services peer Petrofac, which posted forecast-beating results on Monday.

Shares in FTSE 100 Company Wood Group, which have fallen 27 percent in the past month, underperforming Britain's bluechip index by 14 percent, closed at 519 pence on Monday, valuing the company at around 1.9 billion pounds.

Copyright Reuters, 2011