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Trading in line with expectations

Petrofac reports ‘positive start’ to year

Ayman Asfari: ‘good project execution’

Oil services company Petrofac said it has made a positive start to the year and that it continues to respond to a Serious Fraud Office investigation.  

Underlying net profit for the first half of 2017 is expected to be $135 million to $145m; full year net profit is expected to be weighted to the second half of the year.

New order intake stands at $1.7 billion in the year to date while there is a backlog of $13bn as at 31 May.

Net debt is forecast to be around $1.1bn at 30 June in line with expectations.

In a trading update for the half year, Ayman Asfari, group chief executive, said“We have made a positive start to the year, driven by good project execution and financial discipline.

“Our core business continues to trade in line with expectations and we remain competitive, securing new contract awards in both our E&C and EPS divisions throughout the last six months.  The high level of tendering activity is evidence of greater confidence in our core markets and we continue to have a very good pipeline of bidding opportunities. 

“In IES, performance in the first half of 2017 has been impacted by lower realised oil prices, lower capital investment in Mexico and our delayed entry onto the Greater Stella Area development licence.

“Our clear strategy – focused on best in class execution, maintaining our cost-competitiveness to secure new awards and reducing capital intensity – positions us well for the remainder of the year.

Rijnhard van Tets, chairman, commented“Everyone within Petrofac is completely focused on delivering operational excellence for our clients and winning new contracts.

“In addition, we are committed to maintaining our strong balance sheet and reducing net debt.  The board has great confidence in Petrofac’s ability to continue to deliver, and is fully supportive of the work being done to serve our clients and deliver our strategy.

“An independent committee of the board will continue to engage with the SFO and its investigation.”

Full year EBITDA is now expected to be in the range $80m-$100m, principally reflecting lower current forward curve oil prices, a lower contribution from GSA and lower investment in Mexico. 

Group backlog stood at US$13.0 billion at 31 May 2017:

31 May 2017

31 December 2016

$ billion

$ billion

Engineering & Construction

7.6

8.2

Engineering & Production Services

2.9

3.5

Integrated Energy Services

2.5

2.6

Group

13.0

14.3

 

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