December 16, 2017

Amec Foster Wheeler raises cost-cut target, halves dividend

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British oil and gas services company Amec Foster Wheeler Plc raised its cost-savings target for the year and cut its dividend in half, pressured by the slump in oil prices.

Ian McHoul, the chief financial officer at Amec Foster Wheeler, told CNBC Thursday that any cut in dividend is always “poorly received” and said the company was “very disappointed” that it had to make this decision.

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Ian McHoul, the chief financial officer at Amec Foster Wheeler, told CNBC Thursday that any cut in dividend is always “poorly received” and said the company was “very disappointed” that it had to make this decision.

“This is about setting the business up for stability in what are very choppy waters now,” he said. “We’re active in solar, in wind, in mining…so there are pockets of strength. But what we’re seeing from our oil and gas customers is a push down in pricing.”

He explained the company now had the task of putting itself in a position where it could drive profits for the long term.

Oil services firms have seen declining demand as clients struggling with the halving of oil prices attempt to delay expenditure.

Europe’s oil majors have reduced 2015 spending programs by about 15 percent to near $107 billion, and more cuts are seen next year.

Amec Foster said it raised its cost-savings target by $55 million to $180 million by 2017, and that it would recommend a final dividend of 14.2 pence, half the amount announced a year earlier.

On Tuesday, engineering firm Weir Group Plc announced further job cuts, while oil services company Hunting Plc forecast a 90 percent plunge in profit from continuing operations for 2015.

 

 

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