Wood Group Shares Plunge 30% as CEO ‘Disappointed’ in Financial Performance

Wood Group (LON: WG.) shares plummeted 30% on Friday after the company warned of weaker-than-expected trading in Q4 and negative free cash flow for 2025. 

CEO Ken Gilmartin admitted he was “disappointed” with the company’s financial performance despite progress in its transformation efforts.

The engineering and consulting firm said full-year adjusted EBITDA is expected between $450 and $460 million but flagged a negative free cashflow of -$150 to -200 million in 2025 due to weaker trading, legacy claims, and costs related to an independent financial review.

The company has been undergoing a strategic overhaul, exiting lump sum turnkey (LSTK) contracts and implementing cost-saving measures. Wood Group now expects $145 million in savings by 2026, including $60 million in 2025.

While the firm’s order book grew to $6.2 billion, supported by new contracts with BP, OMV Petrom, and Esso Australia, cash flow remains a concern. 

Wood Group aims to raise $150-200 million from asset sales in 2025 to offset cash outflows and maintain debt levels, which stood at $1.1 billion on average in 2024.

The independent review, conducted by Deloitte, is still ongoing, with the company warning of potential prior-year accounting adjustments. 

However, the company reassured investors that the findings are not expected to materially impact cash flow or future cash generation.

Despite the challenges, Wood Group expects positive free cash flow in 2026, driven by cost reductions, operational improvements, and debt management efforts.

“This is a difficult announcement amid our transformation,” said Gilmartin. “While we have made progress, I am disappointed in our financial performance. Consequently, we are taking decisive actions to ensure we can meet the opportunities we have in growing markets, principally energy.”