(Adds CFO comments from interview, details, updates shares)
By Abhiram Nandakumar
Aug 7 Amec Plc, a British engineering
and project management firm, cut its revenue growth forecast for
this year as customers cut back on oil and gas exploration.
Amec's shares fell as much as 3.3 percent after it reported
a 30 percent fall in first-half profit as a stronger pound
overshadowed an increase in orders.
The company said it expects a "modest" growth in underlying
revenue in 2014. It had earlier forecast "good" underlying
"The general guidance is that ... (underlying revenue
growth) is going to be 'lowish' single digits as opposed to
'highish' single digits," Chief Financial Officer Ian McHoul
told Reuters on Thursday.
Amec, which mainly serves the oil and gas industry, said
lower exploration in key markets such as the North Sea was
partially offsetting the strong growth in the clean energy and
Middle East oil and gas markets.
The company's underlying revenue, which excludes currency
fluctuations and other one-offs, grew 4 percent in the first six
months of the year. Underlying revenue grew 2 percent last year.
But, overall revenue fell 7 percent to 1.86 billion pounds
($3.13 billion) in the six months to June 30, as currency
changes reduced 160 million pounds from revenue.
The pound gained 3.3 percent against the U.S. dollar
and 3.7 percent against the euro in the same period.
Amec's pretax profit fell to 83 million pounds from 118
McHoul said while Amec's underlying margins were stable,
they were likely to fall modestly as the company got more
contracts from lower-margin businesses such as clean energy.
Clean energy is the company's fastest growing business. Amec
also operates in the mining, nuclear power and infrastructure
About 60 percent of Amec's revenue comes from the Americas
and nearly 30 percent from Europe. However, McHoul said regions
other than these two were the stronger parts of the business.
The company bought Swiss rival Foster Wheeler AG
earlier this year to expand in Latin America and the Middle
East, and enter the U.S. midstream market.
Amec said on Thursday the closing of the deal was pushed
back to the early part of the fourth quarter from the end of the
The group's order book fell to 4.2 billion pounds at June 30
from 3.9 billion pounds a year earlier.
The company's shares were up 0.5 percent at 1094 pence at
1248 GMT. They earlier were down as much as 3.3 percent, making
them one of the biggest losers on the FTSE-250 Midcap Index
($1 = 0.5941 British Pounds)
(Reporting by Abhiram Nandakumar in Bangalore; Editing by Robin
Paxton, Gopakumar Warrier and Savio D'Souza)