Global engineering giant Amec cut its revenue outlook for the year after first-half sales fell and core profit missed forecasts due to falling demand in the mining sector.
The group, which provides services and equipment for the oil and gas, mining, nuclear and renewable energy sectors, said it expected 2013 revenue to be in line with the previous year, having earlier forecast low-to-mid single digit growth.
The firm, which employs around 1,000 people regionally and has offices in Darlington, Newcastle, Wynyard and North Shields, said lower metal prices have forced miners to cut costs, hitting mining equipment makers such as Caterpillar and Sandvik who have reported falls in order bookings.
Chief financial officer Ian McHoul said: “The reason for the down-tuning of the guidance is really about mining. Mining was down 25% and we’re not seeing very much cause for change in the second half.”
Half-year results posted by Amec showed adjusted profit before tax was £154m, 2% up on the previous year, and core profit (EBITA) rose 4% to 158m, but that was short of a forecast of £163m, based on a poll of 12 analysts conducted by Amec.
In a show of broader confidence, however, the company said it would increase its interim dividend by 15% to 13.5p per share and brought forward its target of achieving earnings per share of 100p by a year to 2014.
Chief executive Samir Brikho said: “AMEC has started 2013 solidly, with stable revenues and improving margins.
“Our record order book of £3.9bn demonstrates how the geographic structure is creating new opportunities for us to grow and service our clients more broadly across our four markets.
“We continue to see good demand for our services, despite some challenging markets and this gives us confidence to reaffirm our outlook for earnings.
“A 15% increase in the interim dividend signals our belief in the underlying strength of AMEC and we continue to expect to achieve an EPS of greater than 100 pence in 2014.”
Meanwhile, Amec has been awarded a multimillion-dollar engineering, procurement and construction contract by Sempra US Gas & Power to design and construct its Copper Mountain Solar 3 project near Las Vegas, which will create more than 300 jobs and 12 permanent operations jobs.