|H1 2009||H1 2008|
|Underlying revenues (£m)||447||324|
|Underlying services revenues (£m)||211||153|
|Underlying profit before financing (£m)||1||(8)|
The global slowdown is impacting the oil and gas and power generation sectors in different ways causing a small reduction in the order book to £1.1bn. Multinational oil and gas companies continue to move ahead with substantial investment plans, albeit more cautiously than in previous years, while the progress of new power generation programmes has slowed due to a lack of affordable project finance and lower demand for electricity.Significant order growth in prior years and improved USD translation rates have helped Energy deliver strong first-half underlying revenue growth across original equipment and services, both of which grew by 38 per cent in the first-half. Oil and gas activity has remained particularly robust and a growing installed base and high utilisation rates are contributing to increased service revenues across the oil and gas and power generation markets.
Operational performance is starting to benefit from the investment the Group has made in new US facilities, such as new flow lines and test beds.
The tidal power generation demonstrator project is expected to start a 500kw demonstration in the Pentland Firth, Scotland later in the year. Development of the fuel cell technology programme is continuing but with investment at a lower level than in prior years.
As a result of strong growth in revenues, improving operational performance and reduced investment in fuel cells, first-half profits increased by £9m.
Continued growth in original equipment and strong aftermarket growth, especially in oil and gas activities, are expected to deliver improving profitability in the second half of 2009 leading to strong growth for the full year.
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