TIDMPFC
RNS Number : 9290W
Petrofac Limited
25 August 2015
Press Release
25 AUGUST 2015
PETROFAC LIMITED
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2015
-- Strong revenue growth, up 25% to US$3.2 billion (2014: US$2.5
billion), as a number of OEC projects move into execution stage
-- Net profit(1) significantly weighted to 2H 2015, reflecting
phasing of project delivery, particularly in OEC, as a number of
projects are expected to reach their percentage of completion
threshold for initial profit recognition in 2H 2015:
o Underlying EBITDA(1) 10% lower at US$305 million (2014: US$340
million)
o Underlying net profit(1) 4% lower at US$130 million (2014:
US$136 million)
-- Success in new orders for ECOM with around US$6.0 billion of
order intake secured in the year to date in our core markets;
continue to see a healthy pipeline of bidding opportunities
-- Group backlog stood at US$20.9bn at 30 June 2015 (31 December
2014: US$18.9bn), with ECOM backlog up 14% to US$17.8bn over 1H
2015, giving excellent revenue visibility
-- On Laggan-Tormore, commissioning is well underway, with major
systems handed over to the client; first gas is now expected in Q4
2015 with additional costs recognised of around GBP30 million in
relation to final completion, pre-commissioning and commissioning
activities(2)
-- Rest of our portfolio remains in good shape and is performing
in line with our expectations(2) ; Greater Stella Area development
remains on schedule for production in mid-2016
-- Continued focus on cost efficiencies with incremental savings
of US$80 million expected in 2015 delivering savings for our
clients and maintaining our strong competitive position
-- Interim dividend maintained at 22.00 cents per share (2014: 22.00 cents)
-- Net debt of US$1.0 billion at 30 June 2015 (31 Dec 2014:
US$0.7 billion), primarily reflecting ongoing investment in IES's
Greater Stella Area project and our offshore installation vessel,
payment of the 2014 final dividend and incremental costs on
Laggan-Tormore
Ayman Asfari, Petrofac's Group Chief Executive, commented on the
half year results:
"Against the backdrop of a challenging environment for the
industry, we are in a strong position. We have record levels of
backlog in ECOM, which brings excellent revenue visibility for the
rest of this year and beyond. Our clients are continuing to invest
in large strategic projects in our core markets, where we have an
unrivalled track record and a very cost-competitive delivery
capability. We continue to drive operational efficiencies to
maintain our cost-competitiveness and we are working with our
clients to address cost pressures and generate value for them
whilst protecting our margins.
"As we look forward, we are focusing on our traditional areas of
strength, driving for best in class operations and project delivery
and improving our cash generation as we reduce the capital
intensity of the business and deliver value from our IES
portfolio."
OPERATIONAL HEADLINES
ENGINEERING, CONSTRUCTION, OPERATIONS & MAINTENANCE
(ECOM)
Onshore Engineering & Construction
-- On Laggan-Tormore, commissioning is well underway, with major systems handed over to client
-- Rest of our portfolio remains in good shape and is performing in line with our expectations
-- Achieved order intake in year to date of over US$4 billion, with major new awards in Kuwait
Offshore Projects & Operations
-- Secured a number of new wins and extensions, totalling
approximately US$800 million, including Oranje-Nassau Energie, CNR
International and Eni
-- Substantial progress made on the SARB3 and Borwin 3 offshore capital projects
Engineering & Consulting Services
-- Good progress made on the Rabab Harweel Integrated Project in Oman
-- Record backlog and revenue visibility following the award of
the Yibal Kuff project in Oman in June worth around US$900
million
-- Awarded a number of contracts in Plant Asset Management,
including an Integrity and Maintenance Programme Development
contract for the Ichthys LNG Project in Australia
INTEGRATED ENERGY SERVICES (IES)
-- Continue to progress contract migration in Mexico and in July
we brought on production from Santuario North East, the first
developed near-field opportunity on the Santuario field
-- Greater Stella Area development in the UK North Sea
progressing well, with first production expected mid-2016
-- On Block PM304 in Malaysia, completed drilling programme on
Cendor field after five years of continuous rig activity on the
Block; production levels expected to ramp up as we tie in new wells
on Cendor phase 2 and optimise well production
-- 1H 2015 production from Chergui gas concession in Tunisia
below expectations due to periods of civil unrest during
March/April, but production has since returned to full capacity
OUTLOOK AND DIVIDENDS
Against the backdrop of a challenging environment for the
industry, we are in a strong position. Our clients are continuing
to invest in large strategic projects in our core markets, where we
have an unrivalled track record and a very cost-competitive
delivery capability. We continue to work with our clients to
address cost pressures and generate value for them whilst
protecting our margins.
From an already high level, our ECOM backlog has grown 14% to
US$17.8 billion over the first half of the year to stand at record
levels, giving us excellent revenue visibility for the second half
of the year and beyond. Our overall portfolio remains in good
shape, with embedded margins consistent with guidance, and we
continue to see a healthy pipeline of bidding opportunities.
Our priorities for the immediate future are focused on returning
Petrofac to its traditional areas of strength through:
-- Execution of our existing backlog, which is primarily in our
core markets, to a high standard with a relentless focus on risk
management across the portfolio
-- Closing-out the Laggan-Tormore gas plant project in line with
our expectations and to the client's satisfaction
-- Delivering the FPF1 floating production facility to enable
first production from the Greater Stella Area development
mid-2016
-- Reducing the capital-intensity of the business and delivering value from our IES portfolio
-- Continuing to drive operational efficiencies to maintain our
cost-competitiveness and retain a healthy backlog
The Board has declared an interim dividend of 22.00 cents per
share, in line with the 2014 interim dividend.
Notes
(1) Before recognition of the year to date loss on
Laggan-Tormore and before exceptional items and certain
re-measurements.
(2) On 25 February 2015, we noted that based on an average oil
price of around US$60 per barrel in 2015, our net profit after tax
was expected to be around US$460m. After recognising the loss in
the year to date on the Laggan-Tormore project of US$263m (US$220m
(as previously announced up to 23 June) plus US$43m (around GBP30m)
of further costs), the Group's net profit before exceptional items
and certain re-measurements for 2015 is expected to be around
US$200m.
Click on, or paste the following link into your browser, to view
the Group's financial statements for the six months ended 30 June
2015:
http://www.rns-pdf.londonstockexchange.com/rns/9290W_1-2015-8-24.pdf
Analyst presentation:
Our interim 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/4000/7464/16532/50794/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 Edwards, Investor Relations Officer
Alison Flynn, Head of Media Relations +44 (0) 207 811 4913
Tulchan Communications Group Ltd +44 (0) 207 353 4200
Stephen Malthouse
Martin Robinson
petrofac@tulchangroup.com
Notes to Editors
Petrofac
Petrofac is a leading international service provider to the oil
& gas production and processing industry, with a diverse
customer portfolio including many of the world's leading
integrated, independent and national oil & gas companies.
Petrofac is quoted on the London Stock Exchange (symbol: PFC).
Petrofac designs and builds oil & 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 customers' needs across the
full life cycle of oil & gas assets.
With more than 20,000 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
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