Petrofac FY Net Profit Falls, Order Book Grows
LONDON, Feb 25 (Reuters) – Oilfield services company Petrofac reported a fall in 2014 net profit on mainly on impairment charges related to over-runs on two major projects, but shares edged up in early trading on a record order book.
The order backlog hit $18.9 billion at year-end, up 26 percent, and Chief Executive Ayman Asfari said the company saw an attractive bidding opportunities in the year ahead.
The stock was up around 5 percent at 0935 GMT.
"A lot of our work is in the Middle East and North Africa mainly for national oil companies and they are continuing to invest through the downcycle," Tim Weller, chief financial officer, told Reuters.
Although lower oil prices will eventually start to hit some projects, Weller said Petrofac was not yet seeing a wholesale rethink of investment plans from the bulk of its clients, unlike the project postponements and capital expenditure cuts undertaken by large oil companies.
Net profit fell to $581 million from $650 million. However, with one-off exceptional items amounting to $461 million, net profit fell to $120 million.
These derived from Petrofac's decision to exit its contract with OMV Petrom for Ticleni in Romania, over-runs on the Greater Stella Area project in the North Sea, and the impact of lower oil prices.
Petrofac also recognised a cumulative loss of around $180 million due to delays at the Laggan-Tormore gas plant project in the Shetland Islands for Total.
(Reporting by Claire Milhench, editing by Jason Neely)
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