Oil field services provider Petrofac (LON:PFC) said full-year results will be heavily weighted to the second half, as it announced a fall in half-year earnings.
Underlying earnings (EBITDA) in the first six months of 2015 were down 10% at US$305mln from US$340mln the year before, while underlying post-tax profit ebbed 4% to US$130mln from US$136mln.
Encouragingly, the group saw strong revenue growth, with the top line heading 25% higher to US$3.2bn from US$2.5bn as a number of onshore engineering and construction projects move into the execution stage.
As at the end of June, the group’s work backlog stood at US$20.9bn, up from US$19.9bn at the end of 2014.
"Against the backdrop of a challenging environment for the industry, we are in a strong position. We have record levels of backlog in ECOM [Engineering, Construction, Operations and Maintenance], which brings excellent revenue visibility for the rest of this year and beyond,” said Ayman Asfari, Petrofac's group chief executive.
“Our clients are continuing to invest in large strategic projects in our core markets, where we have an unrivalled track record and a very cost-competitive delivery capability. We continue to drive operational efficiencies to maintain our cost-competitiveness and we are working with our clients to address cost pressures and generate value for them whilst protecting our margins,” he added.
The group’s troublesome Laggan-Tormore gas plant project in the Shetland Islands, where delays have cost the firm a lot of money, commissioning is now well underway.
First gas is now expected in the final quarter of this year, with additional costs of around £30mln recognised in relation to final completion, pre-commissioning and commissioning activities.
Independent oil analyst Malcolm Graham-Wood said: “CEO Ayman Asfari is remarkably upbeat. Laggan-Tormore is finally getting behind them but not without one last farewell with another £30mln of costs before they finally escape those shackles.
“With Stella now on target for production next year and significant cost savings things might have been a lot worse. I’m sure some analysts will pick up on an increase in debt from US$0.7bn to US$1bn which is for Stella and the offshore vessel but it looks manageable although the vessel stirs some strong feelings amongst followers.”
Shares in Petrofac were up 2.4%, more or less in line with the market, at 748.5p in mid-morning trading.