Oil services giant Wood Group has warned that its earnings fell by almost a fifth as the company took a double blow from the coronavirus pandemic and a battered oil price.
Wood said that it had seen life-for-like revenue drop by around 11% in the first half of the financial year.
Meanwhile, earnings before interest, tax, depreciation and amortisation dropped 19%.
Chief executive Robin Watson said the company had gone through a time unlike any before.
“The global engineering and consultancy market is facing unique and unparalleled challenges in 2020 from Covid-19 and volatility in oil prices,” he told investors in an update on Friday morning.
The price of Brent crude oil fell to below 19 US dollars (£15.30) per barrel in April after starting the year at around 64 dollars (£51.57).
Mr Watson struck a optimistic note, pointing to the 1.3 billion US dollars (£1.1 billion) in new orders it won in April and May.
Much of this has come from renewable energy projects, such as onshore wind and solar in the United States.
Activity in the renewables arms of the business rose 4% while there was a 5% decline in upstream and midstream – that is to say finding, extracting, storing and transporting oil and gas.
Despite an increased focus on renewables, Wood has also won a gas contract in Asia, a deal on an Iraqi oilfield and a contract to help the US Navy with its engineering and design works for fuel sites.
“The relative strength we are seeing in chemicals & downstream, the built environment and renewables, where we will double our revenues in 2020, is helping to mitigate the impact of challenging conditions in upstream and midstream oil and gas,” Mr Watson said.
Adam Vettese, analyst at multi-asset investment platform eToro, said: “The energy services group has been saved by the diversity of its services, with chemicals, renewables and downstream operations compensating to some degree.
“That probably won’t be enough to woo back investors at this moment in time, given how important the oil industry is to the firm. It’s likely to be months or even years before we see oil demand reach pre-Covid-19 levels once more.”
More than 40,000 employees have been working remotely during the cornavirus pandemic.
Mr Watson added: “Despite the disruption, we are continuing to successfully win and execute work, supported by our strategy of broadening the business across the global energy market and the built environment.”
The company is trying to cut around 200 million US dollars (£161 million) from its costs, including reductions in headcounts, restrictions on travel costs and pay cuts for bosses.