Profits slide for Petrofac

Orders boost: for Petrofac

Petrofac saw its profits slide 44% in the first half but a record order intake of $7.2 billion during the period is set to boost its earnings for the rest of the year.

The London-listed oilfield services contractor earned net profit of $136 million in the first six months, compared with $243 million in the same period of last year, as revenue dropped from $2.8 billion to $2.3 billion over the year.

Its earnings before interest, tax, depreciation and amortisation were down at $340 million versus $405 million a year ago.

However, the mammoth haul of engineering, construction, operations and maintenance work, which has lifted the company’s backlog by 35% to $20.3 billion, has given it “very good revenue visibility for the rest of this year and beyond”, Petrofac said in a statement.

Orders secured since the end of the reporting period have increased its total contract so far this year to $8.2 billion.

Its order intake during the period included $4.5 billion in onshore engineering and construction work from major awards in Kuwait, Oman and Algeria, as well as a $1 billion engineering and procurement contract for Petroleum Development Oman to provide services for the Rabab Harweel facility.

In addition, Petrofac has gained several extensions for service contracts in the UK North Sea – including for Total and EnQuest – and recently landed a multi-million dollar frame deal with GDF Suez E&P to support the latter’s operations off the UK, including the Cygnus gas field due on stream next year.

The company said it remains on track to earn full-year net profit of between $580 million and $600 million, in line with previous guidance.

Chief executive Ayman Asfari said the latest awards “reflect ongoing high levels of investment” by clients in the contractor’s key regions.

“Our pipeline of bidding opportunities remains attractive and we are confident of securing a number of further awards and contract extensions during the second half of the year,” he added.

“Activity levels, revenue and net income are expected to increase substantially in the second half of the year as we move into the execution phase on a number of major projects.”

Petrofac insisted it is making “good progress” on stalled work to complete construction of the topsides on the FPF1 semi-submersible production unit at a Polish yard, which has delayed start-up of Ithaca Energy’s Greater Stella field development off the UK to mid-2015.

The company said there was no change to the current schedule, with the unit due for sailaway in spring of next year.

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