Petrofac Limited, a leading international provider of facilities solutions to the oil & gas production and processing industry, today announces its results for the year ended December 31, 2008.
Engineering & Construction
Despite the recent rapid and severe downturn in the global economic outlook, Petrofac has reported a year of excellent growth in 2008 and remains well-positioned to deliver further strong growth in 2009 and beyond.
The group's Engineering & Construction business has continued its excellent record of execution whilst developing its engineering, construction management and project management capacity to accommodate the significant inflow of business seen over the last few months. The group's historic focus on onshore, upstream developments in the Middle East and North Africa combined with its cost-competitive structure has enabled it to secure some US$2.8 billion of new contract awards to date in 2009 and has positioned the business well for further lump-sum opportunities over the medium term. The group's portfolio of Engineering & Construction projects is expected to deliver net margins in line with recent levels.
The group's Operations Services revenues are driven largely by customers' operational expenditure, which is expected to remain reasonably robust despite lower oil prices. The efficient operation of production facilities becomes increasingly important in such an environment, which may lead to new opportunities for the group. Nonetheless, those of the group's activities that are more reliant upon customers' discretionary spending are expected to face a more challenging environment in 2009.
In Energy Developments, the near-term focus remains the commencement of production from the West Don and Don Southwest fields, which is expected in the first half of 2009. The group has a strong balance sheet and there may be opportunities to invest in development assets as smaller independent oil companies are unable to access debt and equity markets.
Overall, our year-end backlog and new awards secured so far in 2009 give us a high degree of visibility of revenue through to 2011, which along with a healthy prospects list, should position us well to deliver strong growth in earnings in the current year and beyond.
"I am delighted by our performance in 2008 and the delivery of another year of excellent growth in revenue and profit," said Ayman Asfari, the group's chief executive.
"Operationally, we have continued to perform well, including successful mobilisation on new contracts secured during the year. We now have more than 11,000 employees and have developed the capacity and capability to participate in large-scale world-class projects, as demonstrated by the recent Asab field development award in Abu Dhabi.
"We have made good progress on the West Don and Don Southwest developments and expect to commence production in the first half of 2009. Our strong balance sheet and significant cash resources mean we are well placed to take advantage of any suitable investment opportunities that present themselves.
"Our strong order book, healthy prospects list and cost-competitive structure, should position us well to deliver strong growth in earnings in the current year and beyond.
"Given the strong cash generation of the group, the Board has taken the decision to increase the percentage of earnings to be distributed by way of dividend from 30% to 35% of full year post tax profits and the proposed final dividend for 2008 is 17.90 cents per share."
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