Amec Foster Wheeler profit down on falling oil and mining markets

LONDON (ShareCast) - Consultancy and engineering group Amec Foster Wheeler (NYSE: AMFW - news) said the slump in the oil and mining markets weighed on its annual profit. The FTSE 250 group reported a 39.2% decline in pre-tax profit to £155m, while even excluding exceptional items and discontinued operations the metric fell 7.6% to £317m, a figure that was largely in line with analysts' expectations.

The company's trading profit dropped 6.4% to £321m as trading margin declined 0.7% to 8.2%, offsetting a 0.5% increase in revenue to £3.99bn, slightly higher than consensus forecasts of £3.81bn.

The group, which raised its full-year dividend 3.1% to 43.3p, said revenue from oil and gas was down 13%, revenue from mining operations fell 14% and environment and infrastructure dropped 3%, while revenue from clean energy rose 11%.

Amec added that it expected the current trading conditions to continue for the foreseeable future with growth in clean energy and Middle Eastern oil and gas markets offsetting tougher conditions elsewhere.

"This mix of performance, together with the increased customer pricing pressure and cost saving plans, is expected to lead to a modest reduction in like-for-like trading margins," the group noted in a statement on Thursday.

However, it added that the recent depreciation of the pound against the dollar has provided a boost to the balance sheet and, on current forecast, it could add £150m to revenue in 2015.

Currency headwinds had trimmed £238m off revenue in 2014.

Amec shares were up 0.08% to 973.75p at 08:32 on Thursday.