Delays and rising costs have hit Petrofac Limited (LON:PFC)’s performance in Engineering & Construction, which is still expected to drive a “modest” free cash outflow at the full year. Asset Solutions continues to see strong demand and an expanding order book, while Integrated Energy Services is ramping up production to capitalise on strong oil prices.
Q1 2022 hedge fund letters, conferences and more
CEO Sami Iskander said, “Looking forward, we expect Asset Solutions and IES to continue to deliver strong performance. Notwithstanding the short-term challenges in the existing E&C portfolio, we continue to expect the second half of 2022 to mark an inflection point for a sustained period of growth in backlog. We have a healthy 18 month Group bidding pipeline and we expect to grow the E&C backlog in 2022 and to secure significant new orders in 2023, underpinned by opportunities in the UAE and offshore wind.”
Petrofac shares were up 3.7% following the announcement.
Petrofac's Earnings
Laura Hoy, Equity Analyst at Hargreaves Lansdown:
“With the Serious Fraud Office investigation finally in the rearview, this year was meant to be one of rebuilding for Petrofac. But lingering supply chain issues from the pandemic and inflationary headwinds have put somewhat of a damper on the group’s Engineering & Construction business. The good news is that other parts of the business are picking up some of the slack—with higher oil prices and strong demand for onshore and offshore asset management keeping a floor under profits.
Despite the challenges, it was promising to see that the group’s still expecting to meet its revised targets. Inflationary headwinds have only strengthened since we last heard from Petrofac, so it’s pleasing to see estimates remained the same.”
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