Seagreen Photography 21 1700X397
23 March 2022

Petrofac Limited results for the year ended 31 December 2021

  • Significant progress on 2021 strategic objectives
  • Long term capital structure in place following capital raise and comprehensive refinancing
  • Business performance net profit of US$35 million(1)(2)
  • Reported net loss of US$(195) million(2) post impairments and separately disclosed items
  • Group order intakeof US$2.2 billion(4)
  • Achieved targeted cost savings of US$250 million
  • Net debt of US$144 million(7) and liquidity of US$705 million(8)
  • Backlog of US$4.0 billion, of which Russia is 0.6%
  • Recently reinstated to ADNOC’s bidding list for all upcoming tenders
  • Well positioned with a Group pipeline of US$37 billion for award in 2022, of which $7 billion is in New Energies


Year ended 31 December 2021

Year ended 31 December 2020 (restated)(3)


Business performance

Separately disclosed items


Business performance

Separately disclosed items
















Net profit / (loss)(2)







Sami Iskander, Petrofac's Group Chief Executive, commented:

"Our 2021 results demonstrate a resilient performance thanks to the hard work and perseverance of our people and a renewed focus on service quality, bringing us closer to our clients. We continued to manage the challenges of COVID-19 while delivering our significant cost reduction targets to enhance our competitiveness. Our relatively mature portfolio has shielded us from the current inflationary environment.
“Significant strategic progress made in 2021 under our plan to rebalance, reshape and rebuild Petrofac saw us resolve the SFO investigation and establish a long-term capital structure for the Group. Furthermore, we recently achieved a significant milestone through our reinstatement to ADNOC’s bidding list, which is a major step forward as we look towards rebuilding the backlog. We are now in a stronger position, having created the right environment to pursue future growth.
“Looking forward, we are focused on securing the backlog that will deliver profitable growth whilst retaining a strict approach to bidding discipline. While clients continue to prioritise cash preservation over new investments, we expect the increasingly supportive energy price environment to improve the outlook for awards as the year progresses. Market fundamentals are strong in our traditional markets, particularly in the MENA region where Petrofac has a leading position, and in New Energies, underpinning the medium-term performance objectives that we are confident will drive significant shareholder value over the coming years.”


Engineering & Construction (E&C)

E&C demonstrated its ability to deliver for clients across the portfolio in difficult circumstances, but financial performance continued to be materially impacted by COVID-19. As expected, revenue decreased as a result of the lower backlog and pandemic-related project delays.

Net profit margins were impacted by cost increases related to the COVID-19 disruption, including the recognition of full-life losses on a small number of contracts. The challenges on these mature projects have been resolved and are not expected to have an impact in 2022.  Margins were further reduced by the write down announced on 11 March, as a result of the progress made in closing out claims in relation to two historical projects.

Cost inflation had limited impact on E&C’s relatively mature portfolio, with procurement largely complete, and we do not expect inflation to present a headwind for margins going forward. Furthermore, having adapted to the new operating environment, clients have started to show more flexibility in settling claims related to COVID-19 and we have now resolved commercial positions on a large number of our projects.

Margins were supported by management actions to reduce costs and by $29 million of tax provision releases in the year.

The contraction in capital spending by clients, initially triggered by the decline in oil and gas prices and the COVID-19 pandemic in 2020, continued into 2021 in our addressable markets. As a result, new order intake in the year was US$1.2 billion (2020: US$0.7 billion), comprising EPC contracts in Oman, Libya and Lithuania and other net variation orders. As the year progressed, the market showed signs of recovery and over 90% of order intake was secured in the second half of the year.

E&C financial results for the 12 months ended 31 December 2021 (1)(2)

  • Revenue down 36% to US$2.0 billion
  • EBIT down to US$(14) million
  • EBIT margin down 3.3 ppts to (0.7)%
  • Net profit margin down 1.6 ppts to 0.4%
  • Net profit of US$8 million
  • US$1.2 billion of new order intake

Asset Solutions (AS)

Business unit previously known as “Engineering & Production Services”

AS delivered a strong financial performance in the year with significant growth in both revenue and margins. Revenue increased across each of its service lines (Asset Operations, Asset Developments and Wells & Decommissioning). Engineering, procurement and construction activity on our Asset Developments projects portfolio progressed well, overcoming challenges presented by the COVID-19 pandemic and with strong delivery on several projects in the MENA region.

Net margins increased significantly due to higher revenues, a lower overhead ratio, high contract margins on some projects, higher income from associates and tax provision releases.

The volume of work in new energies (carbon capture and storage, hydrogen, waste-to-value and offshore wind) increased markedly, with AS executing 16 contracts, predominantly Pre-FEED and FEED studies, up from two contracts in 2020. We further strengthened our position in these sectors through strategic alliances with technology partners and developers, including with Protium for green hydrogen and with Storegga and Co2Capsol for carbon capture and storage. In 2022 we formed an alliance with Seawind Ocean Technology to strengthen our position in the floating offshore wind sector.

Asset Solutions financial results for the 12 months ended 31 December 2021 (1)(2)

  • Revenue up 19% to US$1.1 billion
  • EBIT up 48% to US$74 million
  • EBIT margin up 1.3 ppts to 6.7%
  • Net profit up 115% to US$86 million
  • Net profit margin up 3.4 ppts to 7.7%
  • Underlying net profit margin, excluding tax provision releases, up 1.2 ppts to 5.5%
  • US$1.0 billion of awards, representing a book-to-bill of just over 0.9x


Integrated Energy Services (IES)

Following the disposal of the Mexico assets in 2020, IES financial results in the year reflected the performance of its sole remaining asset, Block PM304 in Malaysia. Production declined due to the unplanned outage in the main Cendor field, partly offset by the start of production from the East Cendor development in June. On a like-for-like basis, revenue increased as higher oil prices more than offset lower production.

IES financial results for the 12 months ended 31 December 2021 (1)(2)

  • Revenue down 55% to US$50 million (up 19% on a like-for-like basis)
    • Disposal of Mexico assets in 2020
    • Average realised oil price(6) up 92% to US$75/boe
    • Net equity production down 35% to 640 kboe on a like-for-like basis
  • EBITDA down 46% to US$21 million (up 40% on a like-for-like basis)
  • Net loss decreased to US$5 million (2020: US$18 million loss or US$14 million on a like-for-like basis), with lower EBITDA and higher tax mitigated by lower interest and depreciation

As a result of East Cendor coming on stream part way through the year, the exit rate net production was 2.9 kboe/d compared with an average of 1.8 kboe/d for the full year. Production in 2022 is expected to benefit from the return of production from the main Cendor field in the second half of the year (c.0.9 kboed).



The reported net loss(2) of US$195 million (2020 restated(3): US$192 million) was caused by separately disclosed items and certain re-measurements of US$230 million (2020 restated(3): US$242 million). These were primarily:

  • US$106 million penalty imposed by the UK courts in connection with the conclusion of the SFO investigation, which was paid earlier this year
  • US$28 million of costs in relation to the Group’s refinancing related costs
  • A non-cash impairment charge of US$58 million following a review of the carrying amount of the investment in Block PM304 in Malaysia based on increased uncertainty in respect of securing an extension for the Production Sharing Contract beyond the current term, which expires in 2026. This comprises:
    • a US$15 million impairment charge of the carrying amount of the investment; and
    • a US$43 million write-down of the associated deferred tax asset based the shorter recoverability period

Consistent with previous periods, all COVID-19 related costs are treated as business performance.



In November 2021, we concluded a capital raise and comprehensive refinancing to create a long term capital structure. This included a capital raise of US$275 million(10), US$600 million of senior secured notes due 2026 and a new US$180 million two-year revolving credit facility. An existing US$90 million bilateral term loan was repaid and replaced with a new US$50 million term loan, maturing in October 2023. As part of the refinancing, we repaid our £300m Covid Corporate Financing Facility, which was due to mature on 31 January 2022.

Free cash outflow of US$281 million (2020 restated(3): US$123 million), principally reflected the impact of lower EBITDA, a working capital outflow, payment of end of service employment benefits provided for in the prior year, and the cash impact of other separately disclosed items. This was largely offset by net proceeds from the capital raise, resulting in a modest increase in net debt, which was US$144 million at year end (2020: US$116 million). Liquidity at 31 December 2021 was US$0.7 billion(8).



In April 2020, the Board cancelled the payment of the final 2019 dividend in response to the COVID-19 pandemic and the fall in oil and gas prices. The Board recognises the importance of dividends to shareholders and expects to reinstate the dividend policy in due course, once the company's performance has improved. Under the terms of the new debt facilities, the company will be permitted to pay dividends from 1 January 2023, subject to the satisfaction of certain covenant tests.


The Group's backlog decreased 20% to US$4.0 billion at 31 December 2021 (2020: US$5.0 billion), reflecting progress delivered on the existing project portfolio and low new order intake in E&C as clients continued to maintain capital discipline and delay new contract awards in response to the COVID-19 pandemic. While the E&C backlog declined from the prior year, strong order intake in the second half resulted in a 14% increase from the 30 June 2021 position.

The Group has minimal current exposure to Russia, which represented 0.6% of Group backlog at 31 December 2021.



31 December 2021

31 December 2020


US$ billion

US$ billion

Engineering & Construction



Asset Solutions



Group backlog





The market outlook is improving and the recovery in energy prices is supportive of increased capital spending by clients in all our addressable markets. E&C has a US$30 billion pipeline of opportunities scheduled for award by the end of 2022 and whilst we expect industry awards will remain low in the near term, current client engagement provides confidence that the pace will increase materially in the second half of the year and beyond. Furthermore, our reinstatement to bidding in the UAE provides significant growth potential, particularly from 2023 when ADNOC is expected to award a number of material contracts. We are well positioned with a competitive cost structure, an enhanced low-carbon bid strategy and a strict commitment to bidding discipline in order to return to sector-leading margins in the medium term.

E&C has US$1.3 billion of backlog scheduled for execution in 2022. It has now reached commercial agreements with a large number of clients on ongoing projects and is expected to deliver EBIT margins(9) of at least 2.5% in 2022.

Asset Solutions has a healthy US$7 billion pipeline of opportunities scheduled for award by the end of 2022. Bidding activity is elevated as clients seek to capitalise on the supportive macro environment to increase production and extend the life of assets.

Asset Solutions has US$0.9 billion of backlog scheduled for execution in 2022 and revenue is expected to continue to increase. EBIT margins(9) are expected to be slightly lower at 5-6% due to the conclusion of certain high margin projects in 2021 as well as increased investment in New Energies capability to position the Group for growth in this market.

The combined US$37 billion Group pipeline for 2022 includes US$6.8 billion of New Energies opportunities, comprising projects in offshore wind, carbon capture and storage, hydrogen and waste-to-value. Approximately a quarter by value relates to offshore wind opportunities, which are more mature and expected to be awarded on schedule in 2022. In other sectors, we are strengthening our position through early-stage engineering studies and alliances with technology partners.

While revenue and margins will inevitably remain subdued in the near term, we are confident that we will start to rebuild the backlog in 2022 and deliver strong growth thereafter. Our medium-term ambition is to deliver revenues of US$4-5 billion, including c.US$1 billion from New Energies, with a sector leading 6-8% EBIT margin and a return to a net cash position. Delivery of these medium-term objectives will create significant value for Petrofac shareholders.



Andrea Abt and George Pierson, each having served for six years, have notified the Board of their intention not to seek re-election as Non-executive Directors at the 2022 Annual General Meeting. They will not be replaced. Consequential changes to Board Committee memberships following these changes will be reviewed in due course.


  • Business performance before separately disclosed items. This measurement is shown by Petrofac as a means of measuring underlying business performance.
  • Attributable to Petrofac Limited shareholders.
  • The prior year numbers are restated in relation to the adoption of the IFRIC decision on cloud configuration and customisation costs, in April 2021 (see note 2.9 of the consolidated financial statements).
  • New order intake is defined as new contract awards and extensions, net variation orders and the rolling increment attributable to Asset Solutions contracts which extend beyond five years.
  • Backlog consists of: the estimated revenue attributable to the uncompleted portion of Engineering & Construction division projects; and, for the Asset Solutions division, the estimated revenue attributable to the lesser of the remaining term of the contract and five years.
  • Average net realised price is net of royalties and hedging gains or losses. It is based on sales volumes, which may differ from production due to under/over-lifting in the period.
  • Net debt comprises interest-bearing loans and borrowings less cash and short-term deposits (i.e. excludes IFRS 16 lease liabilities).
  • Gross liquidity of US$705 million on 31 December 2021 consisted of US$620 million of gross cash and US$85 million of undrawn committed facilities. Gross cash included US$37m held in certain countries whose exchange controls significantly restrict or delay the remittance of these amounts to foreign jurisdictions. It also included US$305m in joint operation bank accounts which are generally available to meet the working capital requirements of those joint operations, but which can only be made available to the Group for its general corporate use with the agreement of the joint operation partners.
  • Guidance has changed from net profit margin to EBIT margin. This better represents the Group’s operating performance and is in line with broader market practice.
  • Gross proceeds from the £200 million capital raise were US$268 million due to the change in FX rate between the announcement of the capital raise at US$275 million and the date when proceeds were received.



Our full year results presentation will be held at 8.30am today and will be webcast live via: https://broadcaster-audience.mediaplatform.com/#/event/6228a7918fa8ce02fc02c19a


Click on, or paste the following link into your web browser, to view our Segmental performance and Financial review for the year ended 31 December 2021 https://www.petrofac.com/media/4sfbuwfy/petrofac-fy-2021-segmental-performance-financial-review.pdf


Click on, or paste the following link into your web browser, to view the Group financial statements of Petrofac Limited for the year ended 31 December 2021


The linked documents are extracts from the Group's Annual Report and Accounts for the year ended 31 December 2021. Page number references refer to the full Annual Report when available.

*Image credit to Seagreen Wind Energy Ltd