Petrofac and Centrica lift expectations
Oilfield services company Petrofac expects better than expected full-year net profit as a result of record revenues and cost-cutting measures.
The company now forecasts $465 million (£370.70m) in net profit excluding losses at its Integrated Energy Services (IES) unit which would reduce net profit to $410m.
The company, which designs, builds, operates and maintains oil and gas facilities said its order book backlog stood at $14.5 billion as of the end of November.
Ayman Asfari, Petrofac’s group chief executive, said: “We are on track to deliver positive results in 2016 in line with guidance reflecting record revenues, solid operational performance across all of our businesses and the delivery of significant cost savings.
“We also continue to make good progress on our strategy to refocus on our core strengths and reduce capital intensity. During the year we exited the Berantai Risk Service Contract in Malaysia and Ticleni Production Enhancement Contract in Romania.
“2016 has been a challenging year for the industry. The deferral and cancellation of project tenders has contributed to significantly reduced order intake in our lump-sum business year to date. Order intake in our reimbursable business has been more resilient, which will partially offset the anticipated reduction in EPC revenues in 2017 from record levels this year.
” Our existing backlog continues to provide excellent visibility for Group revenue next year and our bidding activity has increased during the last quarter of the year.
“We remain very focused on maintaining our cost competitiveness and discipline in a competitive market, and are well-positioned for a recovery in our core markets.”
> Centrica, the owner of British Gas, has lifted its profits guidance after a strong second half of the year.
Following better than expected cost savings and a strong trading performance amid volatile energy markets it now expects to make 16.5p per share. The company credits further cost reductions and strong trading.