Final Results for the Year Ended 31 December 2009

Petrofac Limited (Petrofac, the group or the Company), a leading international provider of facilities solutions to the oil and gas production and processing industry, today announces its final results for the year ended 31 December 2009.

Download the 2009 final results in PDF format:

Part 1

Part 2

FINANCIAL HIGHLIGHTS

• 2009 order intake(1) of US$7.3 billion (2008: US$2.9 billion) with backlog(2) of US$8.1 billion at 31 December 2009 (2008: US$4.0 billion)
• EBITDA(3) up 34% to US$559.0 million (2008: US$419.0 million)
• Net profit(4) up 33% to US$353.6 million (2008: US$265.0 million) on revenue up 10% to US$3,655 million (2008: US$3,330 million)
• Earnings per share (diluted) up 34% to 103.19 cents (2008: 77.11 cents)
• Final dividend up 40% to 25.10 cents (16.69 pence(5)) per share (2008: 17.90 cents); full year dividend up 41% to 35.80 cents (2008: 25.40 cents)
• Return on capital employed(6) of 47.7% (2008: 52.7%)
• Gross cash balances at 31 December 2009 of US$1.4 billion (2008: US$0.7 billion)

Commenting on the results, Ayman Asfari, Petrofac’s group chief executive, said: “Overall, 2009 was another excellent year. We have delivered record results and a record order intake, which gives us outstanding revenue visibility for the current year and beyond.

“While 2009 was a challenging year for our industry, we were successful in growing our capacity and capability, investing in both our people and our systems, to ensure that we maintain our focus on strong operational performance. Through our differentiated and competitive offering, we remain well-positioned to benefit from ongoing investment in oil & gas projects by our key customers in our core markets, which we believe will underpin strong growth in our business in 2010 and over the medium-term.”

OPERATIONAL HIGHLIGHTS

Engineering & Construction

• Record order intake, with US$6.3 billion of new contract awards in 2009, including:
• Major lump-sum contracts in Abu Dhabi, Algeria, Oman and Saudi Arabia; and,
• US$100 million FEED study in Turkmenistan; contract contemplates us moving into a second phase large-scale EPC project during 2010

Offshore Engineering & Operations

• Secured a £75 million 3-year contract with Apache to provide engineering and construction services for the Forties field in the UK North SeaAwarded a £100 million 5-year contract by BP to deliver integrated maintenance management support services for all of BP’s UK offshore assets and onshore Dimlington plant

Engineering, Training Services and Production Solutions

• Continued strong operational performance in service operator role for production of Dubai’s offshore oil & gas

Energy Developments

• Commencement of oil production from West Don field in April 2009, less than 1 year from Field Development Programme approval, followed by commencement of production from Don Southwest field in June 2009
• Recently announced intention to demerge our interests in UKCS assets, including the Don assets, which represents the first major demonstration of our build and harvest strategy
• Acquired FPF1 floating production facility with a view to upgrade, modification and redeployment

OUTLOOK

In Engineering & Construction, we have grown our headcount by around 1,200(7), particularly in India and Indonesia, to ensure that we continue to deliver strong operational performance on our projects in hand, and to strengthen our competitive position. The terms on which our existing portfolio of contracts were secured and our progress to date gives us confidence that we can maintain net margins in this segment of around 10% over the medium-term. We remain very active in our ongoing bidding activity in key markets in the Middle East and Africa and the Commonwealth of Independent States, including in Turkmenistan where our existing contract contemplates us moving into a second phase large-scale EPC project, which positions us well for continued strong growth.

Following a successful second half of 2009 with the extension of a number of operations and maintenance contracts and the award of new contracts with Apache and BP, Offshore Engineering & Operations is well positioned to deliver good growth in 2010. We continue to be very active with tendering activity, as customers continue to look for ways to more effectively manage their supply-chain.

In Engineering, Training Services and Production Solutions, we are seeing an increase in business development opportunities and are anticipating a modest improvement in activity levels in 2010. We remain confident in delivering production enhancement services through Production Solutions under innovative commercial structures and we continue to explore opportunities with our customers.

As recently announced, we intend to demerge our interests in West Don and Don Southwest, which represents the first major demonstration of Energy Developments’ build and harvest strategy. We consider this a timely and attractive way to give our shareholders the opportunity to continue to participate in the value created in the Don development. Going forward, Energy Developments remains integral to our strategy and we continue to review a number of upstream and energy infrastructure opportunities, including the deployment of the FPF1 floating production facility.

DIRECTORATE/BOARD COMMITTEE CHANGES

A number of changes are proposed in respect of Petrofac’s Board composition and committee memberships, which are detailed in a separate announcement.


Notes
 
(1) Order intake comprises new contracts awarded, growth in scope of existing contracts and the rolling increment attributable to contracts which extend beyond five years. Order intake is not an audited measure.

(2) 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 services and facilities management contracts, the estimated revenue attributable to the lesser of the remaining term of the contract and, in the case of life-of-field facilities management contracts, five years. The group uses this key performance indicator as a measure of the visibility of future earnings. Backlog is not an audited measure.

(3) EBITDA means earnings before interest, tax, depreciation and amortisation and is calculated as profit from operations before tax and finance income/(costs) adjusted to add back charges for depreciation, amortisation and impairment.

(4) Net profit for the year attributable to Petrofac Limited shareholders.

(5) 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 2009 final dividend from US dollars into Sterling is based upon an exchange rate of US$1.5038:£1, being the Bank of England Sterling spot rate as at midday on 5 March 2010.

(6) ROCE is calculated as EBITA (earnings before interest, tax, amortisation and impairment charges, calculated as EBITDA less depreciation per note 3 to the financial statements) divided by average capital employed (being total equity and non-current liabilities per the consolidated balance sheet).

Analyst presentation:

A webcast presentation for analysts, held at 9.30am on Monday 8 March 2010, can be viewed at: http://www.investorcalendar.com/IC/CEPage.asp?ID=156080