Aberdeen employer Petrofac hit by oil price slump amid Covid-19

Energy services and engineering group Petrofac has booked a $78 million (£59.6m) loss in the first half of the year and will not pay a dividend amid “considerable economic uncertainty”.

Petrofac is a major Scottish employer with hundreds of staff in Aberdeen and around 2,000 at offshore operations in the North Sea.

The loss for the six months to the end of June compares with a profit of $139m in the same period last year. Revenue fell to about $2.1 billion from just over $2.8bn a year earlier.

Petrofac, which is a key Scottish employer with hundreds of staff in Aberdeen as part of its ­global workforce, has been hit hard by the slump in oil prices and demand amid the coronavirus pandemic.

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Group chief executive Ayman Asfari said: “Our first-half results reflect the deterioration in market conditions triggered by the Covid-19 pandemic and subsequent decline in oil prices.

“In response, we are doing everything in our control to protect both the health and well-being of our people, suppliers and communities, as well as the long-term health of the business.

“These swift and decisive actions are structurally reducing costs, conserving cash and maintaining our competitiveness. At the same time, we have preserved core capability whilst continuing to invest in digitalisation and client relationships.

“Furthermore, our longer-term strategy has transformed Petrofac into a more resilient, capital light business with a strengthened balance sheet and a clear commitment to sustainability.”

Nicholas Hyett, equity analyst at Hargreaves Lansdown, noted: “Lower revenues and profits in the first half were pretty inevitable

“As we would expect there’s slightly better news from the engineering and production business – which is more exposed to essential maintenance activity – where revenues and profits have held up well.

“However, the real challenge for Petrofac is keeping new orders ticking over.”

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