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Investing.com -- Shares of John Wood Group PLC (LON:WG) plummeted by 31% following the announcement of its financial results, which fell short of consensus estimates and showed a decline from the previous year.
The company reported revenue of $5.7 billion, a 3% decrease year-over-year (YoY), compared to the consensus estimate of $5.84 billion.
Despite the revenue miss, the group's adjusted EBITDA is projected to be between $450 million and $460 million, marking an 8% increase YoY and aligning with consensus expectations of $457 million. The order book showed some resilience, standing at $6.2 billion, up from $5.4 billion at the end of the third quarter of 2024 and matching the level at the first half of the year. This was bolstered by significant contract wins with companies such as bp, OMV Petrom, and Esso Australia.
However, the company's outlook for 2025 cast a shadow over these gains. John Wood Group anticipates a negative free cash flow (FCF) in the range of -$150 million to -$200 million for 2025, factoring in lower expected underlying EBITDA growth, exceptional cash costs of approximately $30 million, a one-off working capital unwind of around $70 million, a deferral of $50 million in cash inflow from pension release, professional costs of about $10 million related to a review, and legacy claims liabilities of $50 million.
To counterbalance the negative FCF, the company targets disposal proceeds of $150-200 million in 2025, with average net debt expected to be in line with the 2024 levels of around $1.1 billion before disposals.
The year-end 2024 net debt was reported to be roughly $690 million, virtually unchanged from the end-year 2023 figure of $694 million excluding leases. The group completed the sale of Ethos (NSE:ETHO) for $138 million on December 31, 2024.
Most of the company's debt facilities are set to mature in October 2026.