Shares of the UK-based John Wood Group PLC (GB:WG) gained 1.31% as of writing after the company kept its FY24 guidance stable despite posting higher losses in the first half. The company slipped to a statutory operating loss of $899 million from a profit of $23 million in the same period last year. Meanwhile, H1 FY24 revenue declined 4.8% year-over-year to $2.8 billion.
Wood Group is an engineering services firm having three business segments: Consulting, Projects, and Operations.
Wood Group Faces Losses in H1 FY24
Wood Group reported a loss of $983 million in the first half of FY24, compared to a loss of $27 million a year ago. The higher loss was mainly attributed to an $815 million goodwill write-down in the Projects segment due to legacy acquisitions. Along with this impairment, Wood Group recorded a $140 million exceptional charge related to its exit from lump sum turnkey (LSTK) and large-scale engineering, procurement, and construction (EPC) projects.
Wood Group Confirms its 2024 Guidance
Despite the losses, Wood Group confirmed its full-year guidance and indicated that performance will be stronger in the second half of the year. The company expects a high-single-digit growth in its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) before the impact of disposals.
Moving forward, Wood Group expects its 2025 adjusted EBITDA growth to surpass its medium-term targets. Additionally, the company’s Simplification program is projected to achieve approximately $60 million in savings by 2025, with $25 million already secured.
Is John Wood Group a Good Buy?
On TipRanks, WG stock has received a Hold rating based on three recommendations. The John Wood share price forecast is 177.13p, which is 33% above the current trading price.
