Petro­fac slashes div­i­dend to re­duce debts

The Scotsman - - Business - By PERRY GOURLEY busi­ness­desk@scots­man.com

Oil ser­vices firm Petro­fac has slashed its div­i­dend as debts rose by $400 mil­lion (£309m) to $1 bil­lion, de­spite re­port­ing an in­crease in first-half prof­its yes­ter­day.

The group cut its div­i­dend by 42 per cent to 12.7 cents per share de­spite record­ing a rise in pre-tax prof­its to £109m from £58m in the six months to the end of June.

As well as re­duc­ing its div­i­dend, the com­pany, a ma­jor em­ployer in Scot­land, is also cutting spend­ing plans and sell­ing a stake in a Mex­i­can oil­field.

Chief ex­ec­u­tive Ay­man As­fari said: “We are tak­ing a range of mea­sures to de­liver a sus­tain­able re­duc­tion in net debt to strengthen the bal­ance sheet, and a sus­tain­able div­i­dend pol­icy for our share­hold­ers.”

The group has se­cured $2.7bn of new or­ders in the year to date which it said was ev­i­dence of “con­tin­ued com­pet­i­tive­ness in chal­leng­ing mar­kets”.

“Ten­der­ing ac­tiv­ity re­mains high, we are well placed on a num­ber of bids and have a healthy or­der back­log. This po­si­tions us well for the sec­ond half of 2017,” it added.

Petro­fac has been dogged by con­tro­versy re­cently and is be­ing in­ves­ti­gated by the Se­ri­ous Fraud Of­fice (SFO) un­der sus­pi­cion of bribery, cor­rup­tion and money laun­der­ing in re­la­tion to oil con­trac­tor Unaoil.

To com­pound mat­ters, Ital­ian au­thor­i­ties last week or­dered prop­erty seizures and slapped As­fari with a £276,000 fine af­ter ac­cus­ing the oil ser­vices firm boss of in­sider trad­ing. As­fari has de­nied the claims. 0 ‘Sus­tain­able div­i­dend pol­icy’ – CEO Ay­man As­fari

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