Petrofac in profit with prospect of ‘pipeline of opportunities’

Energy: Upbeat about recovery with more activity in North Sea

Oil and gas production services group Petrofac has swung back into the black and celebrated “good operational performance” across all of its businesses.

The UK company, which has a training division at Montrose, saw its revenue rise by 15% to $7.87 billion in 2016.

The $1 million total net profit, after losses on the Laggan-Tormore project, was a turnaround from the previous year’s loss of $349m.

Petrofac suffered charges over the late delivery of the Laggan-Tormore gas plant in the Shetland Islands for French firm Total.

The underlying net profit was $421m, and the new order intake of $1.9bn and backlog of $14.3bn gave the group good visibility for 2017.

Net debt was down 10% at $617m reflecting strong cash generation and capital expenditure rephasing.

The year saw a “right-sizing” of the business with a 29% reduction in headcount to around 13,500 employees around the world, delivering $120m of annualised savings.

Chief executive Ayman Asfari said: “Petrofac has delivered positive results for 2016, driven by record revenues, significant cost reduction and strong cash generation.

“The group has also demonstrated its track record for operational delivery with more than 240 million man-hours worked across the portfolio.”

The market remained competitive and bidding activity had increased in recent months.

The chief executive added: “We have right-sized our business, have a good pipeline of opportunities across our core markets and remain cost competitive.”

He believed the group was well positioned for a recovery in its core markets, with increased activity in the North Sea sector.

Petrofac Training at Montrose suffered a £544,000 loss in the year to December 2015 after a 27% reduction in turnover.

The survival, firefighting and emergency management training provider suffered a decline from the oil price fall.

Petrofac has delivered positive results for 2016 ... AYMAN ASFARI CHIEF EXECUTIVE