Petrofac orders boost outlook
Up to $14m in first half with Middle East core markets
British oilfield services company Petrofac said yesterday it expected an underlying net profit of US$135 million to $145m 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 11am UAE time 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,” the chief executive Ayman Asfari said.
Bidding activity in the first half of the year was consistent with Petrofac’s guidance of higher activity in its core Middle East markets, the chief financial officer 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, 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 $14.3bn in 2016 as orders picked up in its core Middle East markets.
The company’s high exposure to the Middle East 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 (SFO) 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. Petrofac suspended Marwan Chedid, its chief operating officer, last month in response to the investigation, raising concerns among investors about the company’s ability to win work.
CFO Mr Cochran said yesterday the company was engaged with the SFO and had not paid any penalty, when asked if the company had set aside cash in case of a fine.
High level of tendering activity is evidence of greater confidence in our core markets Ayman Asfari chief executive of Petrofac