Energy services giant Wood Group plans to cut spending by £19.5 million because of low oil prices.
In its preliminary results for 2014, the Aberdeen-based multinational oil and gas services company said it is “taking a number of actions in the lower-price environment”.
It would carry out “short-term and longer-term actions” in working with customers to help reduce costs and increase efficiencies.
It would increase its focus on credit risks and apply tougher filters when looking to make value-adding acquisitions.
Total revenues for the 2014 year rose 7.8% to £4.96 billion, and earnings before interest, tax and amortisation (EBITA) the key measurement of operating profit rose 3.1% to £357.8m. Group profit before tax and exceptional items rose 2.8% to £276.3m.
Wood Group PSN was the strongest performing division, delivering earnings growth of 30.4%, driven by US shale and contract renewals in the UK North Sea.
Revenues from the division, which provides services to optimise and extend assets, rose 16% to £3.02bn.
WGPSN won contract renewals in the UK North Sea worth in excess of £0.98bn in the 2014 year.
The group had cut rates of contractors in the North Sea in May and December, which reduced costs to customers by around 20%.
Revenues at Wood Group Engineering, which provides engineering services to the upstream, subsea and pipeline, downstream, chemical, process and industrial and clean energy sectors, rose 7.3% to £1.39bn.
Earnings from the division were down 5.7% to £151m, with performance overall “impacted by the anticipated lower contribution from Upstream, which saw growth in onshore activity but was impacted by a reduction in US offshore and in Canadian oil sands”.
In turbine activities, total revenues fell 21.5% to £553.4m, and total EBITA dropped 58.8% to £21.6m.
Wood Group chairman Ian Marchant, pictured, said: “The group performed well in 2014, delivering in line with expectations against a backdrop of a steep decline in oil price towards the end of the year.
“We will continue to help customers increase productivity in their new projects and existing operations.
“In line with our focus on customer efficiency, we are also implementing internal cost and efficiency measures to ensure we remain competitive.
“We will remain a reimbursable, asset-light business with a balance of operational expenditure and capital expenditure activities, a broad range of longer two-term contracts and significant customer and geographic diversification.
“As we look to 2015, we expect financial performance to demonstrate the quality of our people and the relative resilience of our business in a challenging market, and we will see the full-year benefit from completed acquisitions.”