Wood energy firm rebounds with Ethos Energy sale completion

In a significant turnaround, troubled Aberdeen-based energy firm Wood has started the new year on a positive note, following a challenging 2024. The company recently announced the completion of its sale of a 51% stake in Ethos Energy Group Limited, a move that is expected to provide a substantial cash boost of £110 million.

Details of the Ethos Energy sale

Wood’s divestment of its stake in Ethos Energy, which specializes in rotating equipment, was finalized on December 31, 2024. The sale was made to private equity firm One Equity Partners, marking a strategic shift for Wood as it seeks to streamline its operations.

Ethos Energy, established in 2014, has a global workforce of approximately 3,600 employees and has been a significant contributor to Wood’s earnings, providing £27 million in adjusted EBITDA in 2023.

Challenges faced by Wood in 2024

The completion of this sale comes after a series of setbacks for Wood throughout 2024. The company faced a tumultuous year, including a significant drop in share prices following the collapse of a proposed takeover by Sidara. Wood’s shares plummeted from nearly £2 to £1.21, resulting in a loss of around £450 million in market value. Additionally, the company reported a staggering £756 million loss in its half-year results, primarily due to exceptional charges, including a £626 million impairment charge.

Looking ahead: A positive outlook for 2024

Despite the challenges, Wood’s leadership remains optimistic about the future. Ken Gilmartin, the chief executive, expressed satisfaction with the completion of the Ethos Energy sale, emphasizing its role in the company’s strategy to focus on core business areas. The divestment is part of a broader simplification program aimed at achieving annual savings exceeding £40 million. Furthermore, Wood’s outlook for 2024 remains positive, with expectations of high single-digit growth, bolstered by a strong performance anticipated in the fourth quarter.

As Wood navigates its recovery, the successful sale of Ethos Energy marks a crucial step in regaining investor confidence and stabilizing its financial standing. The energy sector will be watching closely to see how Wood implements its strategic plans and whether it can sustain this positive momentum in the coming months.