-British energy services provider Wood Group expects to take a one-time charge of about $100 million on its Aegis Ashore missile defence site in Poland, warning of higher costs and a bigger loss to complete the project, it said late Monday.
Losses at Aegis Poland, which involves the construction of buildings to house the Aegis Ashore anti-missile defence facility for the United States Army Corps of Engineers, is estimated at $222 million from a prior forecast of $133 million, it said, due to higher costs.
Shares of Wood Group were down more than 11% at 200 pence by 0911 GMT on Tuesday, underperforming the wider market which is down as the Russia-Ukraine conflict escalates.
The legacy Amec Foster Wheeler (AFW) contract, signed in 2016 before Wood's takeover of AFW, is expected to complete in the second half of this year, Wood said.
"The troubled project has faced several delays and the current view of completion at end 2022 ...is unfortunate timing given the strategic location of this facility close to the Ukrainian border," J.P.Morgan analysts said in a note.
Wood said an external probe and review is underway relating to the historical value of Aegis Poland, delaying the release of its annual results earlier scheduled for March 8.
Wood had also started an internal review after concerns raised internally over the project.
Jefferies analysts believe the news is just the latest in a "multi-year sequence of write-downs & cash charges" for the group.
