24 August 2009
Interim results for the six months ended 30 June 2009
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 interim results for the six months ended 30 June 2009.
Download the interim results for 2009 in PDF format.
- First half order intake(1) of US$5.8 billion (2008: US$1.7 billion) with backlog(2) of US$8.4 billion at 30 June 2009 (31 December 2008: US$4.0 billion)
- EBITDA(3) up 16% to US$207.5 million (2008: US$179.2 million)
- Net profit(4) for the period up 20% to US$145.6 million (2008: US$121.2 million) on revenue up 1% to US$1,586 million (2008: US$1,576 million)
- Earnings per share (diluted) up 22% to 42.70 cents (2008: 35.13 cents)
- Interim dividend up 43% to 10.70 cents (6.46 pence(5)) per share (2008: 7.50 cents)
- Gross cash balances at 30 June 2009 of US$900.2 million (31 December 2008: US$694.4 million)
Commenting on the results, Ayman Asfari, Petrofac’s group chief executive, said:
“Overall, we are very pleased with the group’s achievements in the first half of the year, and our excellent growth prospects.
“Notwithstanding the significantly lower oil price environment experienced in the first half of the year the group has performed well and, subject to any unforeseen circumstances, we are confident that we will deliver earnings growth for the full year of at least 20 per cent. With over US$6 billion of new contract awards secured in the year to date the group has record backlog giving outstanding revenue visibility and underpinning the group’s confidence that strong growth in earnings will continue well beyond the current year.”
Engineering & Construction
- Successful in securing US$5.9 billion of new contract awards in the year to date (US$5.4 billion during 1H 2009), including lump-sum contracts in Abu Dhabi, Algeria, Oman and Saudi Arabia
Offshore Engineering & Operations
- Following increasing tender activity as the year has progressed, success in July in securing a £75 million 3-year contract with Apache to provide engineering and construction services for the Forties field in UK North Sea
Engineering, Training Services and Production Solutions
- Continued strong operational performance in service operator role for production of Dubai’s offshore oil & gas
- 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
- In July, acquired AH001 floating production facility with a view to upgrade, modification and redeployment
In Engineering & Construction, our largest reporting segment, recent contract awards are expected to support strong growth in revenue in the second half of the year. The terms on which these contracts were secured and our progress to date on these awards together with the continued good performance from the rest of our contract portfolio gives us confidence that we can maintain net margins in this segment of around 10% over the medium-term. Furthermore, our ongoing bidding activity in key markets in the Middle East and Africa and the Commonwealth of Independent States continues to position us well for the future.
Revenues in Offshore Engineering & Operations are expected to remain resilient in constant currency terms for the balance of the year. Bidding activity has increased recently and we would look to secure additional business over the coming months which will help position us for growth over the medium-term. However, we do recognise that cost control remains a high priority for our customers, particularly in high-cost markets such as the UKCS, and, as a consequence, we have implemented programmes to reduce our own fixed costs and particularly our property costs. We expect margins for the full year to be somewhat lower than last year.
In Engineering, Training Services and Production Solutions we are also seeing an increase in new business opportunities. However, activity levels in Engineering Services and Training Services are expected to remain subdued for, at least, the balance of this year.
Our near-term focus in Energy Developments remains on tying in the injection wells on the Don assets and commissioning the gas lift on the floating production facility, which is expected to lead to an increase in production levels as the year progresses. In 2010, the second phase of the development should enable us to access additional reserves, following recent discoveries in the Don Southwest field. In addition, we continue to evaluate a number of upstream and energy infrastructure opportunities.
(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 continuing operations before tax and net finance costs adjusted to add back charges for depreciation, amortisation and impairment.
(4) Net profit for the period 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 interim dividend from US dollars into Sterling is based upon an exchange rate of US$1.6575:£1, being the Bank of England Sterling spot rate as at midday on 21 August 2009.
A presentation for analysts will be held at 9.30am today, which will be webcast live via http://www.investorcalendar.com/IC/CEPage.asp?ID=148670.
For further information, please contact:
Petrofac Limited +44 (0) 20 7811 4900
Ayman Asfari, Group Chief Executive
Keith Roberts, Chief Financial Officer
Jonathan Low, Head of Investor Relations
Bell Pottinger Corporate & Financial +44 (0) 20 7861 3232
Notes to Editors
Petrofac is a leading international provider of facilities solutions 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).
The group delivers services through seven business units: Engineering & Construction, Engineering & Construction Ventures, Engineering Services, Offshore Engineering & Operations, Training, Production Solutions and Energy Developments.
Through these businesses 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 11,000 employees, Petrofac operates out of five strategically located operational centres, in Aberdeen, Sharjah, Woking, Chennai and Mumbai and a further 19 offices worldwide. The predominant focus of Petrofac’s business is on the UK Continental Shelf (UKCS), the Middle East and Africa, the Commonwealth of Independent States (CIS) and the Asia Pacific region.
For additional information, please refer to the Petrofac website at www.petrofac.com.