Download our 2011 final results in two parts:
- Revenue up 33% to US$5.8 billion (2010: US$4.4 billion)
- Net profit(1) up 25% to US$539.4 million (2010: US$433.0(2) million)
- Earnings per share (diluted) up 25% to 157.13 cents (2010: 126.09(2) cents)
- Final dividend up 24% to 37.20 cents (23.39 pence(3)) per share (2010: 30.00 cents)
- Backlog(4) US$10.8 billion at 31 December 2011 (2010: US$11.7 billion)
- Net cash balances at 31 December 2011 of US$1.5 billion (31 December 2010: US$1.0 billion)
Ayman Asfari, Petrofac’s Group Chief Executive commented on the final results:
“I am very pleased to present another excellent set of results. 2011 has been an important year for us, with good operational performance across our portfolio of projects, the rolling out of Integrated Energy Services (IES) and positive initial progress in delivering our IES strategy.
“During the year we also set out our medium-term target of more than doubling our recurring 2010 Group earnings by 2015. The extensive pipeline of new bidding opportunities, our strong financial position together with our differentiated and competitive offering and proven track record in project execution increase our confidence in achieving that goal. In 2012, we expect to make further progress towards this ambition, with net profit expected to grow by at least 15%.”
ENGINEERING, CONSTRUCTION, OPERATIONS & MAINTENANCE (ECOM)
Onshore Engineering & Construction
- Good progress on portfolio of projects, including the South Yoloten development in Turkmenistan where we have reached the progress threshold for profit recognition
- Completed the In Salah Gas compression facilities and power generation project in Algeria and the Jihar gas plant in Syria
- Secured new awards in 2011 in Algeria and Iraq, and the Badra project in Iraq in 2012 to date
Offshore Projects & Operations
- Secured a number of new contracts and extensions, including US$540 million of FPF1 upgrade and Duty Holder contracts for the Greater Stella Area development in the Central North Sea
- Record activity levels and good progress towards taking our EPC capability offshore, with high levels of activity on the SEPAT development in Malaysia, where we delivered first oil ahead of schedule, and upgrade of the FPSO Berantai in Malaysia
Engineering & Consulting Services
- Expanded our Asia Pacific engineering hub through a collaboration agreement with a Malaysian engineering company, taking total headcount in Asia Pacific to around 1,250
- Opened a third Indian office, in Delhi, to support growth in activity levels across the Group
- Entered a joint venture with CPECC to provide project management and engineering services on projects for Chinese oil & gas companies in China and internationally
INTEGRATED ENERGY SERVICES (IES)
- Secured first Risk Service Contract in Malaysia, for development of the Berantai field
- Awarded Magallanes and Santuario Production Enhancement Contracts by PEMEX: the first time in over 70 years that production has been managed by a foreign company
- Good progress on Ticleni field in Romania: reversed the decline for the first time in 6 years
- Field Development Programme approved by PETRONAS to develop the third phase of Block PM304, West Desaru, with first oil expected in late 2012
- Agreement to earn 20% interest in Greater Stella Area: first oil expected 2H 2013
- Invested a further US$50 million in Seven Energy in Nigeria taking our interest up to 22.0%(5)
Our backlog gives us excellent revenue visibility for the ECOM division for 2012. Furthermore, we see a strong bidding pipeline for the ECOM division for both the current year and beyond. There are a large number of opportunities in our core markets in the Middle East, North Africa, the Commonwealth of Independent States, particularly the Caspian region, Europe and Asia Pacific. We believe that we can grow our backlog over the medium-term, notwithstanding that we still face significant competition in many of our established markets, to enable us to deliver double-digit average annual growth in revenues, while maintaining our net margins in Onshore Engineering & Construction at around 11% and incrementally growing our margins in Offshore Projects & Operations as we undertake more offshore capital projects.
In Integrated Energy Services, we are focused on ensuring that we continue to build our execution track record, with important delivery milestones throughout 2012 on our existing projects. Nonetheless, we expect to bid on new opportunities through structured bidding processes in Mexico, Romania and Malaysia, as well as through direct negotiation with a number of resource holders (both National Oil Companies and International Oil Companies). Following the signing of a co-operation agreement with Schlumberger in early 2012, which will allow us to pursue larger projects and develop at a faster pace, we have shortlisted a number of Production Enhancement opportunities to pursue jointly. We expect to deliver strong earnings growth in IES in 2012, driven by existing projects: commencement of the Mexican Production Enhancement Contracts; profit recognition on the Berantai Risk Service Contract; improving production on the Ticleni Production Enhancement Contract in Romania; and initial profit from the Ithaca transaction.
Overall, our existing portfolio of projects, the strong pipeline of new bidding opportunities for ECOM and IES, our strong financial position, our differentiated and competitive offering and our proven track record in project execution give us increasing confidence in achieving our medium-term target of more than doubling our recurring 2010 Group earnings by 2015. 2012 should see us make further progress towards that goal, with net profit expected to grow by at least 15%.
(1) Net profit for the year attributable to Petrofac Limited shareholders.
(2) Excluding the gain on the EnQuest demerger in April 2010.
(3) The Group reports its financial results in US dollars and, accordingly, will declare any dividends in US dollars together with a Sterling equivalent. Unless shareholders have made valid elections to the contrary, they will receive any dividends payable in Sterling. Conversion of the 2011 final dividend from US dollars into Sterling is based upon an exchange rate of US$1.5902:£1, being the Bank of England Sterling spot rate as at midday on 2 March 2012.
(4) 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. The Group uses this key performance indicator as a measure of the visibility of future revenue. Backlog is not an audited measure.
(5) On a fully diluted basis assuming the full conversion of all convertible securities and exercise of all outstanding warrants and options.