18th Dec 2007 07:01
Petrofac Limited18 December 2007 PETROFAC LIMITED TRADING UPDATE Petrofac, the international oil & gas facilities service provider, issues thefollowing pre-close trading update ahead of the announcement of its auditedresults for the year ending 31 December 2007, expected to be on 10 March 2008. The group's strong operational performance has continued in the second half ofthe year with sequential growth in revenue and net margin in both theEngineering & Construction and Operations Services divisions. The Boardanticipates that, in the absence of unforeseen circumstances, the Group's netprofit for 2007 will be ahead of the top end of current market expectations (seenote below). The Engineering & Construction division delivered both very strong revenuegrowth and further expansion of net margins in the second half of the year. Theexecution of projects in-hand proceeds satisfactorily, in particular with firstgas achieved on the Kauther gas plant in Oman in November, two months ahead ofexpectation, and with the Hasdrubal and Salam gas plant contracts awarded inlate 2006. During the second half of the year, the division secured additionalbusiness in a number of its key geographical markets, including the award of aUS$600 million lump-sum engineering, procurement and construction (EPC) contractfor the In-Salah gas development in Algeria, new lump-sum contracts expandingthe scope of its work in the Caspian region worth approximately US$200 millionand additional scope under other existing contracts. The division is expected toreport an increase of backlog over the year, which, together with a healthybidding pipeline, should underpin continued strong growth in 2008. The Operations Services division delivered good operational performance acrossits portfolio of UKCS and international contracts in the second half of the yearand achieved good sequential growth in revenue and net margin. Following a sixmonth period of transition the division assumed full turnkey responsibility forthe operation of Dubai Petroleum's offshore oil & gas assets in April 2007. Thenew contract is the division's largest international contract to date and isproceeding positively and in accordance with expectations. The division hassecured new Brownfield and Training contracts in the second half and is expectedto report a year end backlog which is broadly unchanged over the year. Furtherrevenue growth and net margin improvement are expected to continue into 2008. The Energy Developments (formerly Resources) division delivered a strongperformance in 2007 and has been active on a number of projects. The Cendor field, offshore Peninsular Malaysia, which achieved first oil inSeptember 2006 and full cost recovery in March 2007, has produced, on average,in excess of 14,000 barrels of oil per day and has benefited from high oilprices. A further drilling programme is currently in progress, with theobjective of extending peak production and proving additional reserves. InTunisia, construction of the production facilities and associated pipeline ofthe Chergui development is progressing, with first gas now expected around theend of the first quarter of 2008. A well has recently been drilled within Block211/18a in the UK North Sea, to determine the limits of the Don Southwest field.In permit NT/P68, offshore Northern Australia, the division has farmed-in to atwo well appraisal programme. The first well is nearing completion, hasintersected hydrocarbons in the target zones and testing is about to commence.The continued capitalisation of drilling and testing costs, which are expectedto total approximately US$12 million after tax, will be determined followingtesting of the well. As at 31 December 2007, total backlog is expected to be approximatelyUS$4.4 billion (30 June 2007: US$3.9 billion; 31 December 2006: US$4.2 billion)comprising approximately US$2.5 billion from the Engineering & Constructiondivision (30 June 2007: US$2.1 billion; 31 December 2006: US$2.2 billion) andapproximately US$1.9 billion from the Operations Services division (30 June2007: US$1.8 billion; 31 December 2006: US$1.9 billion). Ayman Asfari, Group Chief Executive of Petrofac, commented: "We are very pleasedwith the performance of the Group over the year which has delivered strongrevenue growth combined with margin expansion. We are performing well on ourcontract portfolio and with the new awards secured during the year, thecommencement of the Dubai Petroleum contract, a buoyant outlook in terms ofbusiness development opportunities in our core markets and the anticipatedstart-up of Chergui; we expect another year of strong growth in 2008." Note: The current market expectations for Petrofac's net profit for the year ending31 December 2007, referred to earlier in this announcement, are based onforecasts provided to Petrofac by 13 equity analysts since publication of theGroup's interim results in September 2007. The range of those forecasts is fromUS$155.4 million to US$173.0 million. Ends For further information, please contact: Petrofac Limited +44 (0) 20 7811 4900Ayman Asfari, Group Chief ExecutiveKeith Roberts, Chief Financial OfficerJonathan Low, Head of Investor Relations Bell Pottinger Corporate & Financial +44 (0) 20 7861 3232Ann-marie WilkinsonOlly Scott Petrofac Petrofac is a leading international provider of facilities solutions to the oil& gas production and processing industry, with a diverse customer portfolioincluding many of the world's leading integrated, independent and national oil &gas companies. Petrofac is quoted on the London Stock Exchange (symbol: PFC) andis a constituent of the FTSE 250 Index. Through its three divisions, Engineering & Construction, Operations Services andEnergy Developments, Petrofac designs and builds oil & gas facilities; operates,maintains or manages facilities and trains personnel; and, where return criteriaare met and service revenue synergies identified, co-invests with clients andpartners. Petrofac's range of services allows it to help meet its customers'needs across the life cycle of oil & gas assets. With more than 9,500 employees, Petrofac operates out of four strategicallylocated international centres, in Aberdeen, Sharjah, Woking and Mumbai and afurther 16 offices worldwide. The predominant focus of Petrofac's business is onthe UK Continental Shelf (UKCS), Africa, the Middle East, the Commonwealth ofIndependent States (CIS) and the Asia Pacific region. For additional information, please refer to the Petrofac website atwww.petrofac.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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