23 August 2010
Interim Results for the Six Months Ended 30 June 2010
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 2010.
Download the 2010 interim results in PDF format
- Revenue up 34% to US$2,130.6 million (2009: US$1,586.4 million)
- EBITDA(1) up 55% to US$321.3 million (2009: US$207.5 million) (2)
- Net profit(3) up 128% to US$331.9 million; net profit excluding gain on EnQuest demerger up 42% to US$206.3 million (2009: US$145.6 million)
- Earnings per share (diluted) up 41% to 60.14 cents (2009: 42.70 cents) (2)
- Backlog(4) of US$6.9 billion at 30 June 2010 (31 December 2009: US$8.1 billion), augmented by US$1.1 billion of awards since 1 July 2010
- Completed the EnQuest demerger in April 2010, generating a gain of US$125.6 million
- Interim dividend up 29% to 13.80 cents (8.91 pence(5)) per share (2009: 10.70 cents)
Ayman Asfari, Petrofac’s group chief executive commented on the interim results: “We have achieved an order intake(6) of approximately US$2 billion in the year to date, which, together with our healthy prospects list, gives us confidence that we will grow our backlog over the calendar year. Furthermore, we believe our strong operational performance will enable us to maintain our historical sector-leading net margins in Engineering & Construction over the medium-term.
“Given our strong start to the year, we expect to deliver like-for-like(7) net profit growth for the full year, excluding the gain on the EnQuest demerger, of around 20 per cent.”
Engineering & Construction
- Secured approximately US$1.5 billion of new orders in the year to date in Kuwait, Qatar and Iraq, where we have been awarded our first project
- Delivered good operational performance on significantly increased activity levels, following a record intake of new orders in 2009
Offshore Engineering & Operations
- Improved activity levels and success in securing contract extensions with key customers including BHP Billiton and Britannia
- Completed four small acquisitions, including TNEI and CO2DeepStore which represent the first steps in positioning us in the renewable energy and low carbon sectors
Engineering, Training Services and Production Solutions
- Awarded first production enhancement contract by Petrom in July 2010, to provide services for the Ticleni oilfield and its eight satellite fields in Romania
- Delivered good operational performance on our service operator contract in Dubai, while transitioning towards a technical services agreement with the Government of Dubai
- ‘Build and harvest’ strategy proven with completion of EnQuest demerger; Don investment generated an IRR from inception to demerger of approximately 35%
- Submitted the Field Development Programme for the second phase of the development of the Cendor field in Malaysia, which we expect to commence in the second half of the year
In Engineering & Construction, we continue to bid actively for opportunities in our core markets of the Middle East and Africa and the Commonwealth of Independent States, particularly the Caspian region. Our near-term focus remains working towards conversion to the second phase of the South Yoloten project in Turkmenistan where we have recently submitted our technical and commercial proposals following our work on the first phase. In Iraq, we have commenced early stage engineering work for an International Oil Company which is expected to lead to a larger contract award during the second half of the year.
Our Offshore Engineering & Operations business development activities are focused on significant opportunities, both in the UK and internationally, which we are confident will lead to continued growth in the business.
In Engineering Services, we continue to experience weak activity levels and although the flow of enquiries is beginning to improve we do not expect to see a material improvement in the market until 2011. In Training Services we are seeing an improved performance in our core UK market, whereas performance in our international centres has been mixed. In Production Solutions, we were pleased to be awarded the Ticleni production enhancement contract in Romania in early July. This long-term contract gives us the opportunity to establish a track-record in the provision of our services on a commercial model which we believe will deliver increased value for both our customers and the group.
In Energy Developments, we expect to commence the development of the second phase of the Cendor field, offshore Malaysia, in the second half of this year.
We have achieved an order intake(6) of approximately US$2 billion in the year to date, which, together with our healthy prospects list, gives us confidence that we will grow our backlog over the calendar year. Furthermore, we believe our strong operational performance will enable us to maintain our historical sector-leading net margins in Engineering & Construction over the medium-term.
Given our strong start to the year, we expect to deliver like-for-like(7) net profit growth for the full year, excluding the gain on the EnQuest demerger, of around 20 per cent.
(1) 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.
(2) Excluding the impact of the gain on the EnQuest demerger.
(3) Net profit for the period attributable to Petrofac Limited shareholders.
(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 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.
(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 2010 interim dividend from US dollars into Sterling is based upon an exchange rate of US$1.5482:£1, being the Bank of England Sterling spot rate as at midday on 20 August 2010.
(6) 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.
(7) Like-for-like net profit growth excludes the trading net profit from Energy Developments’ demerged assets of US$12.7 million for the year ended 31 December 2009 and US$2.1 million for the year ending 31 December 2010.
A presentation for analysts will be held at 9.00am today, which will be webcast live via