Petrofac Limited (LSE:PFC) announced a loss for the first six months of the year, in line with guidance, as Covid-related challenges continued to weigh on its performance.
The energy services company reported a net loss of US$14mln for the half-year ended 30 June 2022, narrowing from a loss of US$89mln in the same period last year. Revenue was down to US$1.2bn from US$1.6bn.
Earnings before interest and tax dropped to US$2mln from US$49mln.
The engineering and construction division (E&C) saw revenue decline 40% to US$0.7bn following lower levels of activity and delays on some projects.
The division slipped into a loss of US$44mln at the EBIT level from a US$21mln profit last year, reflecting the recognition of the additional Covid-related project costs to completion and the adverse impact of operating leverage from lower revenue.
“Our performance in the first half continues to reflect the COVID-19 related industry challenges, as we work towards completion on many of the projects in the legacy E&C portfolio,” commented Sami Iskander, Petrofac's group chief executive.
Order intake in the first half was US$1.1bn and the group has an 18-month pipeline of US$57bn. Its order backlog stands at US$3.7bn.
The company said it is now seeing higher levels of bidding activity.
“Moving into the second half of 2022, a significant increase in bidding activity has put us firmly on the path to grow backlog over the full year,” Iskander said.
He said the E&C business has a US$45bn 18-month pipeline of opportunities, with US$7bn of bids already submitted and a further US$7bn under tender.
Iskander sounded an upbeat note on Petrofac’s outlook.
“Overall, we are optimistic about the outlook for the second half, with improved group performance and the start of a sustained period of backlog growth,” he said.
“Supported by a strong commodity price environment and an increasing focus on energy security, the outlook for the industry is robust and the work we have done over the past 18 months means that Petrofac enters this important period in a strong competitive position.”
Net debt was US$341mln at the end of June and liquidity was US$511mln. It expects free cash flow in second half expected to be broadly neutral.