Petrofac – Time To Rebuild

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Petrofac Limited (LON:PFC)’s revenue for the year is expected to be around $3.0bn, down from $4.1bn last year but broadly inline with market expectations. Full-year net income is expected to be consistent with market expectations of $45.5m, helped by the release of $52m in unused tax provisions and $250m of targeted cost savings.

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CEO Sami Iskander said, “Our priority is to now rebuild our order backlog. We secured US$1.5 billion of new awards in the second half to date and the outlook for awards is improving in a more supportive macro environment. Petrofac's cost competitive model and strong client relationships mean that we are well positioned with a healthy pipeline of opportunities scheduled for award in 2022.”

The shares were up 2.4% following the announcement.

Petrofac Will Feeling The Impact Of The Fines

Laura Hoy, Equity Analyst at Hargreaves Lansdown:

“Petrofac’s expecting full year revenue to come in significantly below last year’s as low order intake and coronavirus-related troubles continued to weigh on the business. While the Securities and Fraud Office investigation into bribery claims has finally been settled, the group will be feeling the impact of the ordeal for some time to come.

Not only was it dealt a £77m pound fine, but the group was unable to do business in some of the most lucrative oil and gas markets which has had a significant impact on this year’s results.

Today’s update suggests the group’s hit the ground running as it rebuilds its order backlog under new CEO Sami Iskander. But there’s a long road ahead and covid-related headwinds aren’t helping matters. With revenue and profits expected to remain significantly below 2019 levels for the foreseeable.”

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