Wood Group Hikes Dividend as Cost-Cutting Helps Company Survive Oil Slump
Feb 23 (Reuters) – Oilfield services provider John Wood Group Plc increased its full-year dividend by 10 percent as its aggressive cost-cutting actions helped it conserve cash.
Shares in the company rose 7.2 percent to 230 pence on the London Stock Exchange on Tuesday, making them the largest percentage gainers on the FTSE mid-250 Index.
The company's hike in dividend to 30.3 cents makes it stand out among its peers, as balance sheets in the sector become strained by the slump in oil prices.
Wood Group said it had cut about 8,000 jobs, or about 20 percent of its workforce, and added that it delivered about $148 million in overhead savings in 2015.
The company, which was founded in 1912 as a ship repair and marine engineering firm, said earnings before income, tax and amortisation (EBITA) fell 14.5 percent in the year to $469.7 million. It had forecast EBITA of $465 million for the year.
"With a robust balance sheet and strong cash generation the company remains well placed to weather an extended downturn," Mirabaud analyst David Thomas wrote in a note to clients.
(Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Sunil Nair)
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