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Petrofac says market conditions are improving but predicts 2020 as “year of transition”

Changes through 2020 are expected to impact the short term financial performance, but, improves Petrofac's position for the future.

Petrofac Limited - Petrofac says market conditions are improving but predicts 2020 as “year of transition”

Petrofac Limited (LON:PFC) told investors it is encouraged by an improving market outlook, but, said that 2020 would be “a year of transition”.

Financial results for 2019, released today, present a “solid operational performance”.

Revenue totalled US$5.53bn for the year, down from US$5.82bn in 2018, while earnings (EBITDA) dropped to US$559mln from US$672mln in the prior year.

Net profit for 2019 came in at US$73mln comprising a positive US$276mln business performance against some US$203mln of exceptional items and ‘re-measurements’ – versus US$64mln, US$353mln and a US$289mln hit in 2018.

Petrofac reported positive net cash of US$15mln, and, said it would pay a final dividend of 25.3 cents per share, which maintain the full year payout at 38 cents.

"Our results for 2019 reflect solid operational performance across the business and good progress delivering our strategy,” said Ayman Asfari, Petrofac chief executive.

"Best-in-class execution has delivered attractive margins in our core businesses, underpinned by an unrelenting drive to strengthen our cost competitiveness by investing in talent, local content and digital technology. 

“Our migration to a capital light business and tight working capital management has improved cash flow, with agreed non-core divestments set to further strengthen our balance sheet and enhance returns.”

Asfari added: “we expect 2020 to be a year of transition.

“We are encouraged by the improving market outlook, recent new awards and US$37bn of bid opportunities scheduled for award by the end of 2020.”

“This investment - together with project mix and the low new order intake of recent years - will impact financial performance in 2020, but best positions us for a return to growth as we rebuild our order book."

Quick facts: Petrofac Limited

Price: 166.75 GBX

LSE:PFC
Market: LSE
Market Cap: £576.81 m
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