Investing.com -- Shares of John Wood Group (LON:WG) held steady on Tuesday following the company’s release of its first-half results. Despite reporting a significant net loss and undertaking substantial write-offs, Wood Group reaffirmed its guidance for the year and provided a clear outlook for 2025.

For the first half of 2024, Wood Group reported a net loss of $983 million, driven by charges totaling $966 million. These included an $815 million non-cash impairment of goodwill related to legacy acquisitions and a $140 million charge associated with the exit from lump-sum turnkey (LSTK) and large-scale engineering, procurement, and construction (EPC) activities.

This loss was worse than initial estimates by Jefferies, which had projected a $41 million loss, and consensus expectations of a $36 million loss. Despite these exceptional items, Wood Group’s revenues were reported at $2.84 billion, in line with guidance.

Adjusted EBITDA for the period stood at $219 million, surpassing the guided figure of approximately $210 million and reflecting a margin of 7.7%, up from 6.8% in the previous year. The order book remained stable at $6.2 billion, slightly exceeding the guidance and remaining flat compared to the first quarter of 2024.

“Before exceptionals, results were relatively in line with ours and consensus expectations, with adjusted EBITDA of $219mn coming in slightly ahead of the ~$210mn level guided in the trading update from last month,” said analysts from Morgan Stanley in a note.

Morgan Stanley, J.P. Morgan, and Jefferies emphasized that the large write-off exercise, including the impairment and exit costs, could lead to short-term volatility in the company's share price.

“Key new information includes the recognition of a $815m non-cash goodwill impairment and a $140m exceptional LSTK-related charge as Wood concludes its business review following the appointment of the new CFO in April,” said analysts at J.P. Morgan.m

J.P. Morgan analysts also pointed out that the revenue decline was offset by margin improvements and growth in Operations, reflecting a mixed but strategically focused performance.

Jefferies added that while the financial results might initially impact trading negatively due to the large write-offs, the company’s reaffirmed guidance and strategic adjustments provide a stabilizing factor.

The brokerage noted that Wood Group’s net debt, excluding leases, was reported at $876 million, above the forecasted $792 million but in line with the guidance for a similar level of net debt at year-end 2024 after accounting for planned disposals.