Petrofac returns to profit after surge in revenues

Oilfield contractor Petrofac today said it was on track to meet its full-year profit goals after moving back into the black during the first half.

Petrofac chief executive Ayman Asfari. Picture: Andrew Shaw

The group, which was plunged into the red last year after counting the costs of its delayed Laggan-Tormore gas plant project on Shetland, posted a net profit of $12 million (£9.2m) for the six months to the end of June, compared with a $182m loss for the same period in 2015.

Revenues jumped by 22 per cent to $3.9 billion, which chief executive Ayman Asfari attributed to “record” activity levels across the company, which employs about 18,000 people.

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Asfari 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.”

Petrofac’s order pipeline stood at $17.4bn at the end of June, although this was down from the figure of $20.7bn recorded at the start of the year. The group expect to deliver a net profit for 2016 of about $440m, excluding its Integrated Energy Services (IES) division and before recognising the final charge on Laggan-Tormore.

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In May, the firm said it would take a final hit of $101m linked to Laggan-Tormore, which it had been due to complete for French energy major Total in July of last year. Production at the facility began in February.

Asfari added: “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.”

Petrofac maintained its interim dividend at 22 cents per share.

The group also announced the appointment of former BG Group head of corporate finance Alastair Cochran as its new chief financial officer. The chartered accountant, who started his career with KPMG, is due to take up his new role in October, succeeding Tim Weller who is leaving to become finance chief at security contractor G4S.

Rijnhard van Tets, Petrofac’s chairman, said: “We are very pleased that Alastair has agreed to join Petrofac. His broad range of skills encompassing corporate finance, treasury, risk and strategy, underpinned by his strong financial and commercial acumen, will be a key asset both in the business and around our board table.”