The Courier & Advertiser (Perth and Perthshire Edition)
Laggan-Tormore project weighs on Petrofac
INDUSTRY: Stock rises as firm maintains dividend and CEO says gas project issues are in the past
Oilfield services group Petrofac has blamed a troubled gas field contract for a major profits fall.
Full-year results show the company generated a $600 million increase in revenues to $6.8 billion in 2015.
However, losses relating to the Laggan-Tormore gas field project off Shetland proved a major drag on the firm’s bottom line with net profits coming in at just $9m for the year to December 31.
The figure compares with a profit of $581m in 2014.
The company revealed that net profits for 2015 would have come in at $440m but for the Laggan-Tormore impact.
“Our results for 2015 were adversely affected by the Laggan-Tormore project on Shetland,” group CEO Ayman Asfari said.
“However, we faced up to the exceptional challenges we encountered and honoured our commitment to our client.
“With the plant now successfully operational, these issues are finally behind us.”
Despite the issues, the company reported an increased backlog of work valued at $20.7bn for the coming year and said it had trimmed its debt levels from $733m to $686m.
It also maintained its dividend at 65.8 cents – the same level as paid out in 2014 – and said it was on track to deliver on its net profits guidance for 2016 of circa $450m. Mr Asfari said Petrofac was well positioned despite the challenges facing the oil and gas sector.
“We enter 2016 with a renewed focus on our core strengths,” he said.
“The group’s backlog stands at record year-end levels, giving us excellent revenue visibility for 2016 and beyond.
“We remain committed to reducing the capital-intensity of the business and managing the IES portfolio to maximise value. Our balance sheet remains robust, our working capital position has improved and we remain dedicated to delivering shareholder value.”
Shares in Petrofac closed the day up 63.88 at 805.88 yesterday.