Oil services and engineering firm Amec Foster Wheeler is ploughing ahead with previously announced plans to dispose of North Sea operations in order to meet competition requirements ahead of a end of year merger with Wood Group.
Amec said the competitive process for the divestment was “already well underway”.
It comes as half year results show a slide in revenue due to “challenging conditions” in the upstream oil and gas and solar markets.
Profits before tax increased to £77million for the first six months of 2017, compared to a loss of £446million last year.
Revenues narrowed from 2016’s £2.8billion to £2.3 billion in the same period, a decrease of 24% year-on-year.
Amec Foster Wheeler said that although underlying revenue was down 24% it had been offset by “better operational performance and contract close outs”.
And chief executive Jonathan Lewis said the £2.2billion merger with Wood Group remains on track to complete later this year.
He added: “I am encouraged that the first wave of benefits of the transformation programme we began last year is now evident.
“Operational discipline has improved, we have more than delivered on our cost saving targets and we have also seen the first tangible signs of sustainable growth: in the retained operations, trading margin is up 180 basis points compared to H1 last year with a 2% increase in the order book since the year end.
“Although, as expected, some of our end markets remain challenging, I am pleased that we are making progress across the business – reinforcing the value of a multi-discipline and multi-market customer offering.
“Looking forward, I am confident Amec Foster Wheeler is now moving in the right direction, and I believe that our people and shareholders will have an exciting future as part of the Wood Group, once the deal closes in the fourth quarter.”
Amec FW said underlying revenue fell 18% in the oil, gas and chemicals market due to “longstanding” conditions across upstream markets.
However North Sea volumes increased due to hook up projects.
The firm also made its first steps in unconventional US oil and gas recovery with progress made into eight “small” shale projects.
Amec said the all share offer from Wood Group was set to close in Q4, subject to clearance from the UK Competition and Markets Authority.
The company has also been drawn into a Serious Fraud Office Probe involving historic allegations of corruption involving Unaoil.
Read more about this here.
In the half yearly results Amec confirmed the investigation but said it was “not expected” to impact on the merger with Wood Group.
As at June 30, the firm had £989million of net debt