Petrofac set to raise profits – and in 2013

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OIL services firm Petrofac yesterday confirmed it was on target for higher profits for this year and said it saw scope for further opportunities in 2013.

The group, which designs and builds oil and gas infrastructure around the world, said in an update that full-year net profits should be “at least” 15 per cent higher than the $539.4 million (£332.9m) it reported last year. The firm, which has bases in Aberdeen and Montrose, said it had a strong pipeline of bidding opportunities for 2013. The order intake at its engineering, construction, operations and maintenance division alone totalled $5.3 billion in the year to date.

Last month Petrofac signed a $500m deal with Edinburgh-based explorer Bowleven to develop a gas field off the coast of Cameroon, with first production expected in 2016. It has also secured contracts in Mexico, including its first deal with oilfield services giant Schlumberger.

Analysts noted that Petrofac had built its backlog of orders by 23 per cent since September, and said a shift towards integrated energy services work was making the firm more capital intensive. The group has been spending its cash, with a $1.5bn pile dwindling to $200m in the past 12 months.

Analyst Sanjeev Bahl, at Numis, said Petrofac could exceed its forecasts for next year, but added: “This was a positive statement, but we believe 2013 is likely to be a true test of Petrofac’s ability to win work and maintain high net margins in the face of growing Asian competition.”