09 March 2009
Final Results for the Year Ended 31 December 2008
Petrofac Limited (Petrofac, the group or the Company), a leading international provider of facilities solutions to the oil & gas production and processing industry, today announces its results for the year ended 31 December 2008.
- Revenue of US$3,329.5 million (2007: US$2,440.3 million), up 36.4%
- EBITDA(1) of US$419.0 million (2007: US$301.3 million), up 39.1%
- Net profit(2) of US$265.0 million (2007: US$188.7 million), up 40.4%
- Engineering & Construction net profit of US$224.1 million, up 63.5%
- Operations Services net profit of US$31.8 million, up 10.1%
- Energy Developments net profit of US$21.9 million, down 34.4% (up 25.0% on an adjusted basis at US$38.5 million) (3)
- Backlog(4) at 31 December 2008 of US$4.0 billion (2007: US$4.4 billion) has been augmented by a further US$2.8 billion of new awards secured so far in 2009
- Gross cash balances at 31 December 2008 stood at US$694.4 million (2007:US$581.6 million) an increase of US$112.8 million over the year
- Return on capital employed(5) of 52.7% (2007 restated: 45.7%)
- Earnings per share (fully diluted) of 77.1 cents (2007: 54.6 cents), up 41.2%
- Final dividend of 17.90 cents (12.57 pence(6)) per ordinary share taking dividends for the full year to 25.40 cents per ordinary share (16.66 pence), up 55%. Dividend pay-out ratio increased from 30% to 35%, with effect from 2008 final dividend.
Engineering & Construction
- US$2.0 billion of order intake during 2008, including the Mina Al-Ahmadi refinery pipelines project in Kuwait and Jihar and Ebla gas plants in Syria
- Successful in securing US$2.8 billion of new contract awards in Abu Dhabi and Saudi Arabia in 2009 to date, which have been targeted as key markets for medium-term growth
- First full year of operating Dubai Petroleum’s offshore assets
- Northern Producer Duty Holder contract secured; Venture Production and BHP Billiton Duty Holder contracts extended
- Acquisition of Eclipse and Caltec develops capability to deliver solutions to enhance and improve production and will form part of new Production Solutions business
- Commencement of commercial export of gas from the Chergui gas plant in August 2008
- Significant progress on Don development, with Field Development Programme approval in May 2008, Northern Producer refurbished and on location, subsea infrastructure nearing completion and drilling of three wells commenced (one completed)
Despite the recent rapid and severe downturn in the global economic outlook, Petrofac has reported a year of excellent growth in 2008 and remains well-positioned to deliver further strong growth in 2009 and beyond.
The group’s Engineering & Construction business has continued its excellent record of execution whilst developing its engineering, construction management and project management capacity to accommodate the significant inflow of business seen over the last few months. The group’s historic focus on onshore, upstream developments in the Middle East and North Africa combined with its cost-competitive structure has enabled it to secure some US$2.8 billion of new contract awards to date in 2009 and has positioned the business well for further lump-sum opportunities over the medium term. The group’s portfolio of Engineering & Construction projects is expected to deliver net margins in line with recent levels.
The group’s Operations Services revenues are driven largely by customers’ operational expenditure, which is expected to remain reasonably robust despite lower oil prices. The efficient operation of production facilities becomes increasingly important in such an environment, which may lead to new opportunities for the group. Nonetheless, those of the group’s activities that are more reliant upon customers’ discretionary spending are expected to face a more challenging environment in 2009.
In Energy Developments, the near-term focus remains the commencement of production from the West Don and Don Southwest fields, which is expected in the first half of 2009. The group has a strong balance sheet and there may be opportunities to invest in development assets as smaller independent oil companies are unable to access debt and equity markets.
Overall, our year-end backlog and new awards secured so far in 2009 give us a high degree of visibility of revenue through to 2011, which along with a healthy prospects list, should position us well to deliver strong growth in earnings in the current year and beyond.
Commenting on the results, Ayman Asfari, group chief executive, said:
“I am delighted by our performance in 2008 and the delivery of another year of excellent growth in revenue and profit.
“Operationally, we have continued to perform well, including successful mobilisation on new contracts secured during the year. We now have more than 11,000 employees and have developed the capacity and capability to participate in large-scale world-class projects, as demonstrated by the recent Asab field development award in Abu Dhabi.
“We have made good progress on the West Don and Don Southwest developments and expect to commence production in the first half of 2009. Our strong balance sheet and significant cash resources mean we are well placed to take advantage of any suitable investment opportunities that present themselves.
“Our strong order book, healthy prospects list and cost-competitive structure, should position us well to deliver strong growth in earnings in the current year and beyond.
“Given the strong cash generation of the group, the Board has taken the decision to increase the percentage of earnings to be distributed by way of dividend from 30% to 35% of full year post tax profits and the proposed final dividend for 2008 is 17.90 cents per share.”