British oilfield services provider Wood Plc said on Tuesday it would sell its nuclear energy business for about $305 million to Jacob Engineering, acting to reduce its debt burden as it reported a 2.6% drop in first-half revenue.
Wood's debt surged in 2017 when it paid $2.7 billion to expand into the U.S. onshore shale oil and gas sector with the purchase of Amec Foster Wheeler. Tuesday's results showed its overall net debt was up 14% from the same time last year.
The Aberdeen-based company, which has already sold some other non-core assets, said the disposal of the business in designing, constructing and maintaining nuclear plants and assets would allow it to reduce its leverage to 1.5 times net earnings in the first quarter of 2020.
The company also stuck to its full year outlook and said it expected its second half to be driven by its contract with Saudi state-run oil giant Aramco.
The FTSE-250 company, which provides services to oil and gas and industrial markets, was awarded a five year contract with Aramco last year to provide engineering and project management services to develop the Marjan oil field in Saudi Arabia.
Wood reported adjusted core earnings of $384 million, with margins of 8%, both higher than the numbers the company reported a year ago after a change in accounting methodology. The company said it was not restating the earlier results after the change and so would not compare the numbers.
Total revenue dipped to $4.79 billion compared with $4.92 billion last year and total order book stood at $9.19 billion as of June 30, also down from a year earlier.