Wood Group Plunges as Deloitte Launches Review of Business After Project Write-Offs

Oil and gas services business Wood Group said its chief executive Robin Watson has quit as it revealed it is facing a potential £525m hit to profits from project cost overruns and delays.

Shares in the FTSE 250 company plunged by two-fifths on Tuesday after it revealed that it was expecting to take the hit as it continues to face challenges on a major gas project in Australia and other contracts.

The Aberdeen-based group, which employs 35,000 workers, said it is now expecting underlying operating profits for this year to be “materially below” the £446m it made last year.

Wood Group has been hit by a string of problems with its gas processing business in Western Australia, while it has also been hit by delays to North Sea oil and gas projects. It has been forced to write down the value of assets, such as equipment, by £525m as a result.

The company said it had appointed Deloitte to carry out a broad review of its business. It said it was reviewing “all options” for its gas processing business in Australia, including a potential sale.

Watson, who has been chief executive of Wood Group since 2013, said: “The challenges we have outlined in recent months, and the resulting financial impact, mean that now is the right time for me to step aside and allow the board to appoint a new leader to take the business forward.”

He will be replaced on an interim basis by Ken Gilmartin, the group’s chief operating officer.