24th Jun 2014 06:51
LONDON (Alliance News) - Petrofac Ltd Tuesday said it has seen good performance at its Engineering, Construction, Operations & Maintenance division in the first six months of 2014 and has not been significantly impacted by the ongoing destabilisation in Iraq.
The oil and gas services company said it continues to expect net profit for the full year to be in the range of USD580 million to USD600 million after having to put out a profit warning in May due to lower-than-expected earnings from its Integrated Energy Services operations, partly from delays in the development of is major Greater Stella Area project in the North Sea.
However, the company said it is seeing better performance at its ECOM division with progress being made on its engineering, procurement and construction projects, along with an order intake of USD6.8 billion in the year to date.
It added that its operations in Iraq, which make up around 5% of its expected revenues in 2014, have not been significantly impacted by the fighting in the country. Petrofac said it continues to monitor events closely.
Insurgent Sunni rebels have forced a civil war in Iraq, taking over a swathe of territory in north and west of the country, including the country's second biggest city, Mosul.
"The group's backlog stands at record levels, giving us good revenue visibility for the rest of this year and beyond," Petrofac Chief Executive Ayman Asfari said in a statement. "Our pipeline of bidding opportunities remains attractive, which, together with our strong competitive position, should see us secure a number of further awards over the second half of the year."
Petrofac said its net debt has increased to USD1.3 billion at May 31 from USD700 million at December 31, 2013, due partly to ongoing investment in its Integrated Energy Services business and in an offshore installation vessel.
The company also said its profits for 2014 will be heavily weighted towards the second half as it moves towards the execution phase of a number of projects and expects to achieve further Onshore Engineering & Construction contracts during the year.
In May, Petrofac announced delays to the development of its topsides processing plant at the FPF1 floating production facility on the Greater Stella Area. It now believes it will not achieve the relocation of the developed facility to its site before this year's winter weather, without completing significant offshore work, and has therefore moved back this process until spring 2015.
As such, production from the Greater Stella development has now also been held back until mid-2015.
By Tom McIvor; [email protected]; @TomMcIvor1
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