Petrofac full-year core profit beats expectations

Petrofac, which designs, builds, operates and maintains oil and gas facilities, said new order intake stood at $5.2 billion, compared with $1.9 billion it reported same time last year. (Courtesy Petrofac)

BENGALURU: Oilfield service firm Petrofac reported better-than-expected core earnings on Thursday and said chief executive Ayman Asfari would resume full duties with immediate effect.
The company said it had concluded that restrictions imposed on Asfari in May 2017 were no longer appropriate.
Britain’s Serious Fraud Office (SFO) began an investigation in May into the activities of Petrofac and its units in connection with a probe into Monaco-based Unaoil on suspected bribery, corruption and money laundering.
Last month, the company said its top management, including chairman and executive directors, would be interviewed by the SFO.
“We expect the market to take positively the resumption of duties from the CEO ... The market may perceive this as reflecting positively on the SFO investigation outcome,” Morgan Stanley analyst Robert Pulleyn said in a note.
Petrofac also said chief operating officer Marwan Chedid had stepped down and would act in an advisory capacity for a transitional period to assist on his succession.
Chedid was suspended in May and he consequently resigned from the board.
The company said it planned to exit the deep-water business and expects to take an impairment charge of $176 million related to its offshore construction vessel JDS6000.
Oilfield service companies had been hurt by weak demand as recent subdued oil prices forced explorers and producers to cut capital expenditure and defer or cancel contracts.
However, Petrofac said in December it saw a recovery in orders and it continued to see a high level of tendering activity in its core markets.
The company, which designs, builds, operates and maintains oil and gas facilities, said new order intake stood at $5.2 billion, compared with $1.9 billion it reported same time last year.
Petrofac said net debt was about $600 million as at December 31, well below the $850 million it forecast in December.
Earnings before interest, tax, depreciation and amortization rose 3.7 percent to $730 million for the year ended December 31, beating analysts’ average estimate of $695.2 million, according to Thomson Reuters.
However, the company reported a total net loss of $29 million, taking charges of $372 million related to exceptional items.
Revenue fell 18.8 percent to $6.40 billion with an order backlog of $10.2 billion at the end of 2017, compared with $11.7 billion, a year ago.