viewPetrofac Limited

Petrofac boss boasts of “a good set of first half results”

"We remain focused on our core and delivering organic growth as the market recovers,” Ayman Asfari said

oil and gas operations
Petrofac reported US$2.78bn of first half revenue

Petrofac Limited (LON:PFC) shares rose as its chief executive Ayman Asfari described Wednesday’s interim financials as “a good set of first-half results”.

The FTSE 250-listed oil services and engineering reported some US$2.78bn of revenue for the six months ended June 30, versus US$3.12bn in the comparative period of 2017, though profitability measures arguably improved.

Focusing on its business performance, Petrofac claimed a US$190mln profit though as a result of some US$207mln of impairments and exceptional items the company actually reported a net loss of US$17mln.

READ: Petrofac to exit Greater Stella project with Ithaca transaction

Net debt came in at US$900mln, which Petrofac described as in line with expectations.

It highlighted new orders of US$3.3bn for the period, adding to the pipeline ‘backlog’ of US$9.7bn as of June 30.

"We remain focused on our core and delivering organic growth as the market recovers,” Petrofac CEO Asfari said in the results statement.

“The group has secured US$3.3bn of new orders in both established and adjacent markets year to date and is well placed on several bids due for the award before the end of the year.

“Our focus on operational excellence is reflected in improved margins and continued good progress across our project portfolio in the first half.  Furthermore, we are well positioned for the second half with good revenue visibility, a strong competitive position and healthy liquidity.”

In afternoon trading, Petrofac shares were 1.6% higher at 670.80p.

Nicholas Hyett, equity analyst at Hargreaves Lansdown commented: “Debt is a bit of a blot on the copybook at the moment, but with sales of its oil & gas assets coming thick and fast that should fade, and bar a major oil crash the group has more than enough financial headroom to see it through the near term.”

He concluded: “Overall we think Petrofac is improving. But it’s a much smaller business than it was a few years ago, and investors shouldn’t forget the SFO investigation still looming over the group either.”

 -- Adds share price, analyst comment --

Quick facts: Petrofac Limited

Price: 179.45 GBX

Market: LSE
Market Cap: £620.74 m

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