Proactive Investors - Run By Investors For Investors

Petrofac shares lower as revenue drops

"Petrofac has reported good results that reflect solid execution and excellent progress delivering our strategy,” said Ayman Asfari, Petrofac chief executive
oil and gas operations
Petrofac shares fell 1.97% to 407.2p

Petrofac Limited (LON:PFC) shares traded lower in Thursday’s early deals as the oil services firm’s financial results confirmed a drop in revenues and business profits.

Revenue for 2018 was reported at US$5.82bn, down from US$6.39bn, while net profit came in at US$64mln - with a US$353mln business performance offsetting a US$289bn negative impact of exceptional items.

The ‘business performance’ for 2018 at US$353mln represents a 2% decline from the US$361mln tally in the preceding year, but, smaller exceptional impacts meant that Petrofac could report the positive net profit versus the US$29mln loss for 2017.

Petrofac highlighted some US$5bn of new order intake and a US$9.6bn order backlog as of December 31.

READ: JP Morgan downgrades Petrofac as shareholders band together

"Petrofac has reported good results that reflect solid execution and excellent progress delivering our strategy,” said Ayman Asfari, Petrofac chief executive.

Asfari added: "Looking forward, we are well-positioned for 2019 with good revenue visibility.

“Whilst we have a busy tendering pipeline and are well-placed on a number of bids, there is a higher degree of uncertainty in the level of awards in the near-term. We are nevertheless targeting a book to build of greater than one.”

The company announced a 38p per share full-year dividend.

Nicholas Hyett, analyst at Hargreaves Lansdown, in a note, described the financial results as a slide show whilst highlighting the Serious Fraud Office (SFO) investigation rumbles on.

Hyett said: “Full-year numbers are really a slideshow at the moment – and it’s not often you say that.

“The far more pressing issue is the SFO investigation into alleged bribery and corruption, and the effect that might be having on Petrofac’s ability to win new business.

“To be fair the order-book’s been shrinking for years, but we worry that as the SFO investigation gets closer to home, potential partners will become ever more cautious.

“We worry things could still get worse before they get better – one former employee has confessed to eleven bribery charges, but none of them are related to the Kazakhstan operations that originally sparked the SFO investigation.

“It’s worth noting that Petrofac hasn’t been charged with any offences, but that doesn’t mean the investigation isn’t already doing damage.”  

View full PFC profile View Profile

Petrofac Limited Timeline

Newswire
February 28 2019

Related Articles

drone
March 29 2019
RMS is taking action to address the issues at Geocurve and looks forward to “renewed growth in sales to new clients” while it remains "excited by the opportunities at GyroMetric"
Online payment
April 02 2019
The company's payment services specialise in card-not-present transactions, payments made without face-to-face contact or verification, usually online or via mobile
Stobart
March 26 2019
“The company continues to make strong commercial progress in its core aviation and energy operating divisions and is trading in line with management expectations," Stobart said.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use