CONSULTANCY and engineering group Amec Foster Wheeler said the broad range of expertise in its North-East operations would play a key role in helping the recently formed group combat the impact of falling oil prices.

In its first set of annual results since last year's merger, the FTSE 250 business reported a 39.2 per cent decline in pre-tax profit to £155m, largely due to the cost of buying Foster Wheeler, but total revenue grew 2 per cent to £3.92bn, in line with expectations.

Rising revenue from its power business will help offset for declines in oil operations this year after the crash in crude oil prices, said chief executive Samir Brikho.

Amec, which has its European engineering division headquartered in Darlington, last year agreed a £2bn deal to buy US firm Foster Wheeler, which has offices in Middlesbrough, in a bid to win more work in the oil and gas sector.

The rebranded Amec Foster Wheeler employs about 700 people in the combined Tees Valley operations, with an additional 200-plus in its environmental services headquarters in Newcastle. An additional 500 people are employed across the region offsite or on project work.

John Pearson, the company's group president Northern Europe & CIS, said: “Many of our oil and gas customers are facing big challenges right now. However that gives us real opportunities to do something different, by listening to them and adapting to the market needs. We have a wealth of combined expertise in the North-East, which we are pulling together into our newly named Tees Valley Centre in Lingfield Point, Darlington.

“The newly-formed Amec Foster Wheeler combination gives us a real edge in that drive to do something different, with a more diversified business, innovations created by the combination of expertise, and the ability to move our resources across different industries.”

The business said its trading profit had dropped 6.4 per cent to £321m as trading margin declined 0.7 per cent to 8.2 per cent, offsetting a 0.5 per cent increase in revenue to £3.99bn, slightly higher than forecasts.

The group, which raised its full-year dividend 3.1 per cent to 43.3p, said revenue from oil and gas was down 13 per cent, revenue from mining operations fell 14 per cent and environment and infrastructure dropped 3 per cent, while revenue from clean energy rose 11 per cent.

Amec added that it expected the current trading conditions to continue for the foreseeable future with growth in clean energy and Middle Eastern oil and gas markets offsetting tougher conditions elsewhere.

"This mix of performance, together with the increased customer pricing pressure and cost saving plans, is expected to lead to a modest reduction in like-for-like trading margins," the group noted in a statement.

However, it added that the recent depreciation of the pound against the dollar has provided a boost to the balance sheet and, on current forecast, it could add £150m to revenue in 2015.

In the North-East Amec Foster Wheeler offers a wide range of expertise in sectors including, water and wastewater engineering services, transmission and distribution, onshore and offshore asset management, and clean energy, including CCS (carbon capture and storage).