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UPDATE 2-UK's John Wood sees 2009 in line, ups H1 dividend

Published 08/26/2009, 04:58 AM
Updated 08/26/2009, 05:03 AM
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* H1 pretax $160.8 million vs year-ago $181.3 million

* Ups interim dividend 11 percent to 3.1 cents

* Says recent oil prices will not affect E&P spend in H2

* Shares down 1.8 percent

(Adds CEO comments, shares, Lamprell)

By Victoria Bryan

LONDON, Aug 26 (Reuters) - British energy services company John Wood Group Plc expects its results for 2009 to be in line with expectations, it said on Wednesday as it posted an 11 percent fall in first-half pretax profit.

The Aberdeen, Scotland-based company said its North Sea activities were holding up well and saw strong underlying growth, though it did not expect recent higher oil prices to have much impact on exploration and production spending in the second half.

"I think the industry consensus for oil prices is for $60 to $90 (per barrel) over the next few years and the price has been stronger than people anticipated recently," Chief Executive Allister Langlands told Reuters. "However, we're still in a phase where people are looking closely at projects and costs."

Wood Group reiterated it expected a 10 to 15 percent reduction in global exploration and production spending, as well as a decrease in service company activity in 2009.

It announced a surprise 11 percent increase in its interim dividend to 3.1 cents, in contrast to peer Lamprell which on Wednesday scrapped its interim dividend after seeing its order book almost halve.

Shares in Wood Group, which have gained 75 percent so far this year, were down 1.8 percent at 0800 GMT at 319-1/2 pence.

Credit Suisse upgraded the company to "outperform" from "neutral" and increased its target price on the stock to 357p from 280p.

"Wood Group is less likely to see consensus earnings downgrades relative to the rest of the oil services sector in our view," the analysts wrote in a note.

Wood Group reported first-half pretax profit of $161 million, compared with $181 million last year, on revenue down 5 percent at $2.4 billion. EBITA came in at $187.7 million, down from $207.9 million.

The consensus forecast for 2009 EBITA is $359.5 million, compared with $441 million in 2008, according to figures supplied by the company.

The group is also planning to expand its operations in the Middle East, Africa and Asia Pacific and had announced on Tuesday the purchase of a majority stake in a Saudi Arabian engineering business.

"We're always looking at small acquisitions of under $100 million and there's two or three things that we're looking at now," Langlands said. (Editing by Dan Lalor and David Holmes)

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