UK’s Petrofac expects strong first-half profit

LONDON: British oilfield services company Petrofac Ltd on Tuesday said it expected an underlying net profit of $135 million to $145 million for the first half of 2017 as strong bidding activity in its core markets led to a robust order book.

Shares in the company were down 2.6 per cent at 415 pence at 0810 GMT on the London Stock Exchange. “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,” CEO Ayman Asfari said in a statement.

Bidding activity in the first half of the year was consistent with Petrofac’s guidance of higher activity in its core Middle Eastern markets, CFO Alastair Cochran said. Full-year underlying net profit would be weighted towards the second half of the year in a ratio of about 40:60 per cent, he added.

Order book stood at $13 billion as of May 31, said the company, which builds and operates oil and gas facilities. It recorded an order book value of $14.3 billion in 2016 as orders picked up in its core Middle Eastern markets.

The company’s high exposure to the Middle Eastern oil markets resulted in good backlog coverage for 2017 as record production in the region drove up contract awards. Petrofac is under investigation by the UK’s Serious Fraud Office for its dealings with Monaco-based Unaoil, which Petrofac said it had engaged primarily in Kazakhstan to provide local consultancy services between 2002 and 2009. — Reuters