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US/Iraq tension hits Amec

GROWING TENSION between the US and Iraq is hitting design work carried out by Amec's American subsidiary Agra, the company said last week.

Clients in the power, mining and paper industries in the US are slowing down work worth around $100M (£66M) until the situation becomes clearer.

The warning came as Amec unveiled a 7% increase in its pretax profits for the six months to 30 June. Turnover fell slightly from £2.1bn to £2.06bn during the first half.

'We are already seeing some plans for projects being delayed, ' said Amec chief executive Sir Peter Mason. He did not expect projects to be scrapped but warned that delayed progress would hit earnings.

Amec's capital projects division saw operating profits increase slightly from £20.1M to £21.4M, while turnover fell to £282M from £293M.

The US construction management division is continuing to bid selectively for higher margin work, and saw first half orders fall £300M as a result.

Mason said that Amec was in the final stages of taking over French contractor Spie, in which it has a 46% stake.

Amec will take up the option to buy the remaining 54% and is expected to complete the move next spring. This is expected to cost the contractor between £50M and £70M.

INFOPLUS www. amec. com

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