Petrofac slashes dividend to reduce debts
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