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Bidding pipeline puts Petrofac in ‘strong position’

Ayman Asfari

Ayman Asfari

Oil services company Petrofac said a strong pipeline of bidding opportunities mean it is well-positioned to meet challenges in the sector.

It reported growth in revenue from $3.2bn to $3.9 billion for the half year to 30 June with record activity levels.

The company returned to profit after plunging into the red last year as a result of delays to the Laggan-Tormore gas plant project on Shetland.

It posted a net profit of $12 million (£9.2m)  compared with a $182m loss for the same period in 2015.

The Aberdeen-based company expects to deliver net profit in 2016 in line with expectations and has declared a maintained interim dividend at 22 cents per share.

It says there is an order intake of $1 billion for the first half and a strong bidding pipeline for engineering & construction.

There is a $17.4bn backlog which gives “excellent revenue visibility” for the second half and into 2017, it said in a statement. 

The company said it has made good progress on delivering cost efficiencies from reorganisation and operational excellence  initiatives.

Ayman Asfari, chief executive, said“We have delivered a positive set of results for the first half of the year, reflecting good project execution. We are on track to meet expectations for the full year 2016 and our high level of backlog gives us excellent revenue visibility for 2017.

“While there have been few project awards in our core markets in the year to date, we have a strong pipeline of bidding opportunities and we are actively bidding on a large number of projects. We have one of the most cost-competitive delivery capabilities in our industry, enabling us to maintain our bidding discipline while delivering value for our clients.

“We have made good progress towards reducing the capital intensity of the business and we remain committed to delivering value from the IES portfolio.”

In a statement, the company said: “In what is a challenging period for the industry, we are well-positioned. We remain focused on our core proposition: strong project execution, clear geographic focus, a disciplined approach to bidding and a sustainable, cost-effective structure.

“Our backlog stands at high levels, giving us excellent revenue visibility for 2H 2016 and 2017 and our overall portfolio is in good shape. We have a strong pipeline of bidding opportunities and we are actively bidding on a large number of projects in our core markets.

“We continue to drive cost optimisation and operational excellence to improve upon our already very cost-effective structure. We have one of the most cost-competitive delivery capabilities in our industry, enabling us to maintain our bidding discipline while delivering value for our clients. 

“We have made good progress towards reducing the capital intensity of the business and we remain committed to delivering value from the IES portfolio. We continue to manage the balance sheet to support the dividend and deliver shareholder value.”

> Company appoints new CFO 

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