Monday, August 22, 2011
Petrofac announced its interim results for the six months ended June 30, 2011.
- Revenue up 25.2% to US $2,711.1 million (2010 restated: US $2,165.8 million)
- Net profit up 6.6% to US $246.3 million (2010 restated: US $231.0 million)
- Earnings per share (diluted) up 6.7% to 71.84 cents (2010 restated: 67.31 cents)
- Interim dividend up 26.1% to 17.40 cents (10.54 pence) per share (2010: 13.80 cents)
- Backlog US $11.4 billion at 30 June 2011 (December 31, 2010: US $11.7 billion; 30 June 2010: US $6.9 billion)
- Gross cash balances at 30 June 2011 of US $1.8 billion (December 31, 2010: US $1.1 billion)
Ayman Asfari, Petrofac's group chief executive commented on the interim results:
"We have had a successful year to date, with good operational performance across our portfolio of projects and encouraging progress against our recently announced Integrated Energy Services strategy. We are well on course to deliver like-for-like net profit growth in 2011 of at least 15% and in-line with current market expectations.
"With a strong financial position, a differentiated and competitive offering and a proven track record in project execution, we remain confident of achieving our medium-term growth target of more than doubling our recurring 2010 earnings by 2015."
Engineering & Construction
- Order intake in the year to date of US $1.6 billion with new awards in Algeria, Iraq and Malaysia
- Good progress on South Yoloten development, in Turkmenistan: substantially completed construction of temporary facilities and placed the majority of orders for procurement items
- Completed the Jihar gas plant in Syria and the In Salah Gas compression facilities and power generation in Algeria Offshore Engineering & Operations
- Secured a number of new contracts and extensions, including a contract to provide maintenance services on the Rumaila oilfield in Iraq for BP
- Record activity, including on the SEPAT development and upgrade of the FPSO Berantai (formerly the East Fortune) in Malaysia (both being undertaken jointly with E&C)
Engineering, Training Services and Production Solutions
- Opened a third Indian office, in Delhi, to support growth in activity levels across the group
- Entered into an MOU for a technical training partnership with PETRONAS to develop competency-based training for operations and maintenance personnel in Malaysia
- Good progress on Ticleni in Romania, improving production through optimising pump settings, working over wells and bringing back on-stream the first five of many shut-in wells
- Agreed to invest up to a further US $75 million in Seven Energy taking our interest up to 24.5%
- Selected bidder on Magallanes and Santuario Production Enhancement Contracts in Mexico
- Secured first Risk Service Contract (RSC) in Malaysia, for development of the Berantai field
- Acquired FPF3 (formerly the Jasmine Venture), deployed on the Jasmine field in the Gulf of Thailand and leased to Pearl Energy, a subsidiary of Mubadala, and now operated by Offshore Engineering & Operations
- Pre-invested in field infrastructure in readiness for future developments, including the acquisition of FPF4 (formerly the Cossack Pioneer)
- Cendor phase 2 in Block PM304, offshore Malaysia, progressing to schedule and entered into an MOU with PETRONAS to accelerate the third phase of Block PM304, West Desaru
We are confident that we can continue the good progress that we have achieved in Engineering & Construction in the year to date. With high levels of backlog, we have outstanding revenue visibility which should ensure that we report strong growth in our full year revenues and we expect full year net margins to be in line with our medium-term guidance at around 11%.
While Offshore Engineering & Operations activity levels and revenues are expected to continue at record levels, net profit is expected to be lower in the second half of the year, as the first half benefited from significant progress on the SEPAT development and a provision release following completion of a long-term maintenance services contract. Net margins for the full year are expected to be substantially higher than in the prior year.
The second half performance of the Engineering, Training Services and Production Solutions reporting segment is expected to be broadly in line with the first half of the year, albeit with a greater contribution from Production Solutions, as we expect a general improvement in our consultancy and technology businesses and a positive contribution from the Ticleni Production Enhancement Contract.
In Energy Developments, our operational assets are expected to continue to perform broadly in line with the first half, with the exception of the Ohanet RSC, which ends, as expected, in October. On the Berantai field development, we expect the FPSO Berantai to mobilize to the field in early 2012, with first gas from the field expected shortly thereafter.
With a strong financial position, a differentiated and competitive offering and a proven track record in project execution, we are confident that we will continue to deliver superior value for our customers and sector-leading returns for our shareholders.
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