TIDMPFC
RNS Number : 2678D
Petrofac Limited
25 June 2019
25 June 2019
PETROFAC LIMITED
TRADING UPDATE
Petrofac issues the following pre-close trading update ahead of
the announcement of its results for the six months ending 30 June
2019 on 28 August 2019.
-- Trading in line with prior guidance
-- New order intake (1) of US$1.7 billion in the year to date
-- Net debt (2) expected to be around US$0.1 billion at 30 June 2019
Ayman Asfari, Petrofac's Group Chief Executive, commented:
"We are trading in line with our prior guidance reflecting solid
operational performance across the business.
"We continue to maintain excellent client relationships in all
of our markets, although new order intake in the year to date
reflects our recent challenges in Saudi Arabia and Iraq. Looking
forward, the Group has a busy tendering pipeline in other markets
with around US$15 billion of bid opportunities due for award in the
second half of the year.
"We are making good progress delivering our strategic
objectives. We continue to target best-in-class delivery for our
clients and are improving our competitiveness by reducing costs,
driving digitalisation, increasing local content and investing in
talent. Furthermore, we are well positioned in the second half with
good revenue visibility, a strong balance sheet and high levels of
tendering activity."
Engineering & Construction (E&C)
Overall, Engineering & Construction results are forecast to
be in line with management guidance, with revenues for the full
year expected to be around US$4.5 billion and net margins at the
low end of guidance.
We have continued to make steady progress delivering our
portfolio of projects. In Malaysia, the RAPID project is
substantially complete with all units ready for the introduction of
gas. On the Upper Zakum Field Development in the UAE, commissioning
work at the central and west islands is at an advanced stage. In
Saudi Arabia, the Jazan South tank farm is mechanically complete,
whilst the Jazan North tank farm and Fadhili projects are nearing
mechanical completion. In Kuwait, we are focused on the delivery of
priority units on the KNPC Clean Fuels project and water has been
introduced into the Lower Fars Heavy Oil plant. We are also
preparing for the introduction of power at the BorWin 3 offshore
grid connection project in the North Sea. Meanwhile, our
engineering, procurement and construction management (EPCm)
projects are progressing well: the Al Taweelah Alumina Refinery
recently started up, and both Yibal Khuff and the Rabab Harweel
Integrated Project are nearing completion.
We have secured new orders worth US$1.6 billion in E&C in
the year to date (1H 2018: US$1.6 billion(3) ), including a
lump-sum engineering, procurement and construction (EPC) contract
for the Ain Tsila Development Project in Algeria and the Mabrouk
Project in Oman.
Engineering & Production Services (EPS)
Engineering & Production Services is performing in line with
expectations, with growth in Projects offsetting lower activity
from Operations.
We have secured US$0.1 billion of awards and extensions in the
year to date (1H 2018: US$0.5 billion(3) ), including new awards
and contract extensions in the UK North Sea, Oman, UAE and
Iraq.
Integrated Energy Services (IES)
Net production is expected to be approximately 2.1 million
barrels of oil equivalent (mmboe) for the first half of the year
(1H 2018: 3.1 mmboe), in line with expectations and reflecting
divestments in the second half of 2018. The average realised oil
price (net of royalties) for the first half is expected to be
approximately US$69 per barrel of oil equivalent (1H 2018:
US$56/boe), reflecting higher realised prices and production
mix.
Financial position
Group backlog stood at US$8.9 billion at 31 May 2019:
31 May 2019 31 December
2018 (3)
US$ billion US$ billion
Engineering & Construction 7.6 8.0
Engineering & Production Services 1.3 1.6
Group 8.9 9.6
Net debt (2) is expected to be around US$0.1 billion at 30 June
2019 (31 December 2018: US$90 million net cash), reflecting the
reversal of temporary favourable working capital movements at the
end of 2018, the phasing of tax and dividend payments as well as
the purchase of treasury shares. We continue to review options for
our remaining non-core assets, consistent with our strategy to
enhance returns.
Conference call
Alastair Cochran, Chief Financial Officer, will host a
conference call for analysts and investors at 8am today.
Notes
(1) New order intake comprises new contract awards and
extensions, net variation orders and the rolling increment
attributable to EPS contracts which extend beyond five years.
(2) Net debt comprises interest-bearing loans and borrowings
less cash and short-term deposits (i.e. excludes IFRS 16 lease
liabilities).
(3) On 1 January 2019, the EPCm business was reclassified from
the EPS division to the E&C division. The EPCm business is
presented within the E&C division in prior period comparative
figures.
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 expressed 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
Aaron Clark, Investor Relations & Communications Manager
aaron.clark@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
Martin Robinson
LEI 2138004624W8CKCSJ177
Notes to Editors
Petrofac
Petrofac is a leading international service provider to the oil
& gas production and processing industry, with a diverse client
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 clients' needs across the
full life cycle of oil & gas assets.
With around 11,500 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.
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END
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