TIDMPFC
RNS Number : 3473I
Petrofac Limited
30 August 2016
Press Release
30 August 2016
PETROFAC LIMITED
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2016
Six months ended Six months ended
30 June 2016 30 June 2015
--------------------------- ---------------------------------------- ----------------------------------------
US$ millions Exceptional Exceptional
items items
and and
Business(1) certain Business certain
performance re-measurements Total performance re-measurements Total
--------------------------- ------------- ----------------- ------ ------------- ----------------- ------
Revenue 3,888 - 3,888 3,180 - 3,180
--------------------------- ------------- ----------------- ------ ------------- ----------------- ------
Net profit/(loss)(2) 135 (123) 12 (133) (49) (182)
--------------------------- ------------- ----------------- ------ ------------- ----------------- ------
Net profit/(loss)
before losses
on Laggan-Tormore
project 236 n/a n/a 130 n/a n/a
--------------------------- ------------- ----------------- ------ ------------- ----------------- ------
EBITDA(3) 332 n/a n/a 9 n/a n/a
--------------------------- ------------- ----------------- ------ ------------- ----------------- ------
EBITDA before
losses on Laggan-Tormore
project 433 n/a n/a 305 n/a n/a
--------------------------- ------------- ----------------- ------ ------------- ----------------- ------
-- Strong growth in revenue to US$3.9 billion (2015: US$3.2bn) with record activity levels
-- Strong growth in net profit and EBITDA reflecting the phasing of profit recognition
-- Expect to deliver net profit in 2016 in line with
expectations: consensus net profit approximately US$440m(4) before
recognising the final charge on Laggan-Tormore and excluding
IES
-- Exceptional items and certain re-measurements of US$123
million post-tax, primarily non-cash items related to IES; net book
value of IES portfolio stands at US$1.6 billion(5)
-- Robust balance sheet with net debt(6) of US$877 million at 30
June 2016 (31 December 2015: US$686m); interim dividend maintained
at 22.00 cents per share (2015: 22.00 cents)
-- Group order intake of US$1.0 billion in 1H 2016; strong
bidding pipeline for Engineering & Construction for 2H 2016 and
2017
-- Group backlog(7) stood at US$17.4 billion at 30 June 2016 (31
December 2015: US$20.7bn), giving excellent revenue visibility for
2H 2016 and 2017
-- Good progress on delivering cost efficiencies from Group
reorganisation and operational excellence initiatives
Ayman Asfari, Petrofac's Group Chief Executive commented on the
results:
"We have delivered a positive set of results for the first half
of the year, reflecting good project execution. We are on track to
meet expectations for the full year 2016 and our high level of
backlog gives us excellent revenue visibility for 2017.
"While there have been few project awards in our core markets in
the year to date, we have a strong pipeline of bidding
opportunities and we are actively bidding on a large number of
projects. We have one of the most cost-competitive delivery
capabilities in our industry, enabling us to maintain our bidding
discipline while delivering value for our clients.
"We have made good progress towards reducing the capital
intensity of the business and we remain committed to delivering
value from the IES portfolio."
OPERATIONAL HEADLINES
Engineering & Construction (E&C)
-- Fully demobilised from the Laggan-Tormore project site and
provisional acceptance certificate received from client, confirming
completion of project
-- Delivered good performance on our portfolio of lump-sum
engineering, procurement and construction (EPC) projects
-- Currently actively bidding on a large number of projects
where award is expected in 2H 2016 or 1H 2017
Engineering & Production Services (EPS)
-- Delivered improved performance from our reimbursable and
engineering, procurement and construction management (EPCm)
projects
-- Secured US$500 million of new contracts and extensions in the
UK North Sea, including: a Service Operator contract with Anasuria
Operating Company Limited, a Duty Holder contract with BP and a 3-
year contract extension for Total E&P UK
-- In July, secured two major contracts with Repsol Sinopec for
the provision of engineering support services and onshore and
offshore personnel
Integrated Energy Services (IES)
-- Agreement reached with PETRONAS for cessation of the Berantai
Risk Service Contract which will result in accelerated
reimbursement of outstanding capital and operational
expenditures(8)
-- FPF1 floating production facility now on location on the
Stella field having completed onshore commissioning
-- Production from the Chergui gas plant in Tunisia has been
shut-in for most of the year to date due to civil unrest in the
country
-- Continue to work towards migration of our Production
Enhancement Contracts (PECs) to Production Sharing Contracts (PSCs)
in Mexico
-- Formally exited Ticleni PEC in Romania in August 2016
OUTLOOK
In what is a challenging period for the industry, we are
well-positioned. We remain focused on our core proposition: strong
project execution, clear geographic focus, a disciplined approach
to bidding and a sustainable, cost-effective structure.
Our backlog stands at high levels, giving us excellent revenue
visibility for 2H 2016 and 2017 and our overall portfolio is in
good shape. We have a strong pipeline of bidding opportunities and
we are actively bidding on a large number of projects in our core
markets.
We continue to drive cost optimisation and operational
excellence to improve upon our already very cost-effective
structure. We have one of the most cost-competitive delivery
capabilities in our industry, enabling us to maintain our bidding
discipline while delivering value for our clients.
We have made good progress towards reducing the capital
intensity of the business and we remain committed to delivering
value from the IES portfolio. We continue to manage the balance
sheet to support the dividend and deliver shareholder value.
Notes
(1) Business performance is used as a means of measuring the
underlying performance of the business (see the interim condensed
consolidated income statement and note 2 to the financial
statements).
(2) Profit/(loss) for the period attributable to Petrofac
Limited shareholders.
(3) EBITDA means earnings before interest, tax, depreciation and
amortisation and is calculated as profit before tax, net finance
costs, exceptional items and certain re-measurements, but after our
share of results of associates (as per the interim condensed
consolidated income statement), adjusted to add back charges for
depreciation and amortisation (as per note 3 to the consolidated
financial statements).
(4) Company compiled consensus net profit for the Group, before
recognising the final charge on the Laggan-Tormore project of
US$101 million (as announced on 6 May 2016) and excluding IES, is
approximately US$440 million. Including IES, consensus net profit
is approximately US$410 million.
(5) Includes oil and gas assets (within property, plant and
equipment), other financial assets in respect of the Berantai Risk
Service Contract and Greater Stella Area development (note 15 to
the financial statements), our investment in Seven Energy (note 14
to the financial statements), investment in associates PetroFirst
Infrastructure Limited and Petrofac FPF1 Limited (note 13 to the
financial statements), and the FPSO Opportunity (within oil and gas
facilities in property, plant and equipment). Excludes oil and gas
facilities held under finance leases and working capital
balances.
(6) Cash and short-term deposits less interest-bearing loans and
borrowings.
(7) Backlog consists of the estimated revenue attributable to
the uncompleted portion of lump-sum engineering, procurement and
construction contracts and variation orders plus, with regard to
engineering, operations, maintenance and Integrated Energy Services
contracts, the estimated revenue attributable to the lesser of the
remaining term of the contract and five years. Backlog will not be
booked on Integrated Energy Services contracts where the Group has
entitlement to reserves. Integrated Energy Services' backlog of
US$2.8 billion relates to four Production Enhancement Contracts in
Mexico. We will stop recognising backlog in respect of these
contracts upon completion of their migration to Production Sharing
Contracts. The Group uses this key performance indicator as a
measure of the visibility of future revenue. Backlog is not an
audited measure.
(8) Less an impairment charge of US$26 million post-tax. See
note 6 to the financial statements.
Click on, or paste the following link into your browser, to view
the Group's financial statements for the six months ended 30 June
2016 -
http://www.rns-pdf.londonstockexchange.com/rns/3473I_-2016-8-29.pdf
ANALYST PRESENTATION
Our half year results presentation for analysts and investors
will be held at 9.30am today, which will be webcast live via:
http://cache.merchantcantos.com/webcast/webcaster/4000/7464/16532/63567/Lobby/default.htm
Ends
Disclaimer:
This announcement contains forward-looking statements relating
to the business, financial performance and results of Petrofac and
the industry in which Petrofac operates. These statements may be
identified by words such as "expect", "believe", "estimate",
"plan", "target", or "forecast" and similar expressions, or by
their context. These statements are made on the basis of current
knowledge and assumptions and involve risks and uncertainties.
Various factors could cause actual future results, performance or
events to differ materially from those described in these
statements and neither Petrofac nor any other person accepts any
responsibility for the accuracy of the opinions expressed in this
presentation or the underlying assumptions. No obligation is
assumed to update any forward-looking statements.
For further information contact:
Petrofac Limited
+44 (0) 207 811 4900
Jonathan Low, Head of Investor Relations
jonathan.low@petrofac.com
Jonathan Edwards, Investor Relations Manager
jonathan.edwards@petrofac.com
Alison Flynn, Group Head of Communications
alison.flynn@petrofac.com
+44 (0) 207 811 4913
Tulchan Communications Group
+44 (0) 207 353 4200
petrofac@tulchangroup.com
Stephen Malthouse
Martin Robinson
NOTES TO EDITORS
Petrofac
Petrofac is a leading international service provider to the oil
and gas production and processing industry, with a diverse client
portfolio including many of the world's leading integrated,
independent and national oil and gas companies. Petrofac is quoted
on the London Stock Exchange (symbol: PFC).
Petrofac designs and builds oil and gas facilities; operates,
maintains and manages facilities and trains personnel; enhances
production; and, where it can leverage its service capability,
develops and co-invests in upstream and infrastructure projects.
Petrofac's range of services meets its clients' needs across the
full life cycle of oil and gas assets.
With around 18,000 employees, Petrofac operates out of seven
strategically located operational centres, in Aberdeen, Sharjah,
Abu Dhabi, Woking, Chennai, Mumbai and Kuala Lumpur and has a
further 24 offices worldwide.
For additional information, please refer to the Petrofac website
at www.petrofac.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KKLBLQVFBBBE
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