Petrofac Limited (LON:PFC) shares rose in Tuesday morning’s deals as traders shrugged off expectedly weak interim results.
The company told investors that trading and contract awards were materially impacted by coronavirus (COVID-19) and the collapse in crude oil prices earlier in the year.
READ: Petrofac expects 70% revenue slump in certain businesses
It reported a US$78mln net loss versus a US$139mln profit in the comparative period of 2019, and, said it made a business performance net profit of US$21mln compared to US$154mln last year.
"Our first-half results reflect the deterioration in market conditions triggered by the Covid-19 pandemic and subsequent decline in oil prices,” said Ayman Asfari, chief executive.
Asfari added that the company is structurally reducing costs and conserving cash.
“Our longer-term strategy has transformed Petrofac into a more resilient, capital-light business with a strengthened balance sheet and a clear commitment to sustainability.
“I am confident that this strategy and our actions best position Petrofac for the recovery when it occurs.”
Nicholas Hyett, analyst at Hargreaves Lansdown, meanwhile, added: “Lower revenues and profits in the first half were pretty inevitable – with the oil price collapse leading to a slide in the value of Petrofac’s own production assets and customers delaying activity thanks to a combination of the oil price environment and coronavirus working restrictions.
“As we would expect there’s slightly better news from the Engineering & Production business – which is more exposed to essential maintenance activity – where revenues and profits have held up well. However, the real challenge for Petrofac is keeping new orders ticking over. The order book has shrunk again, and commentary around new orders isn’t encouraging (with awards delayed into next year).”
In London, Petrofac shares rose by 2.79p or 2.48% to change hands at 169.35p.