Petrofac Limited ( PFC) Petrofac Limited: AGM Statement
26-May-2022 / 07:00 GMT/BST Dissemination of a Regulatory
Announcement that contains inside information according to
REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The
issuer is solely responsible for the content of this
announcement.
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Press Release 26 May 2022
AGM STATEMENT
Petrofac Limited (the Company) is holding its Annual General
Meeting today. Alongside this event, the Company provides the
following update on current trading and reiterates the Company's
medium-term prospects.
In an update to shareholders, Group Chief Executive Sami
Iskander will comment: "I am pleased with the strategic progress we
made in 2021 to establish a strong platform and I want to thank our
shareholders, clients, and other stakeholders for their continued
support as we position the business to capitalise on the multi-year
upcycle ahead of us, underpinned by structural tailwinds from high
energy prices.
"We are experiencing some near-term headwinds as we complete a
number of EPC projects in our relatively small, mature portfolio,
which will impact E&C's 2022 performance. However, the outlook
for order intake in E&C remains robust with a diverse and
active bidding pipeline, giving us confidence that we will achieve
our medium-term performance ambition. This includes achieving Group
revenue of USUSD4-5 billion, including c.USUSD1 billion from new
energies, with a sector leading 6-8% EBIT margin and a return to a
net cash position. Delivery of these medium-term objectives will
create significant value for all Petrofac stakeholders."
"In current trading, Asset Solutions and IES continue to perform
well, benefitting from the strong macro environment and our
differentiated service offering across core and new markets.
UPDATE ON BUSINESS UNIT TRADING
The outlook for new awards in E&C is robust, supported by
high energy prices and increased focus on energy security. Bidding
activity is high, and we expect that the second half of 2022 will
mark an inflexion point for a sustained period of growth in the
E&C backlog.
On the current portfolio, the lingering impact of the pandemic
continues to impact progress, increasing costs and deferring
revenue and profit recognition to later periods.
E&C has limited exposure to the current inflationary
environment given that procurement is substantially complete on
much of the portfolio and construction is mainly based on fixed
unit-rate contracts already in place. Nevertheless, as mature
projects advance towards completion, we are experiencing cost
overruns and some relatively unfavourable commercial settlements
with clients.
These dynamics will largely play out within the year, with a
number of projects scheduled for completion over the course of the
year and early 2023. As a consequence, we now expect a small EBIT
loss in E&C in 2022.
Notwithstanding these short-term headwinds, we are confident
that with high current bidding activity and strict bidding
discipline, E&C will rebuild its backlog and grow its margins
over the medium term.
Asset Solutions has performed well in the year to date and full
year EBIT margins are expected to be in line with the 5% to 6%
guidance range. Order intake has been strong, with significant
awards in the Wells & Decommissioning service line in
Australia, the Gulf of Mexico and Mauritania as well awards for
Asset Operations and Asset Developments in the UK and India. In New
Energy Services, the strong momentum in 2021 has continued to
increase in 2022 with a series of early-stage awards and we are
making material progress with developing further strategic
alliances with technology providers.
IES is performing well, with the high oil price having a
positive impact on earnings. Assuming an average USUSD100 brent
price for unhedged production for the remainder of 2022, this
business unit is expected to deliver EBITDA of between USUSD80
million and USUSD90 million.
Overall, principally as a result of the E&C performance, the
Group is now expected to have a modest free cash outflow for the
year.
Our pre-close trading statement on our first half trading will
be published on 28 June 2022.
ENDS
Disclaimer:
This announcement contains forward-looking statements relating
to the business, financial performance and results of Petrofac and
the industry in which Petrofac operates. These statements may be
identified by words such as "expect", "believe", "estimate",
"plan", "target", or "forecast" and similar expressions, or by
their context. These statements are made on the basis of current
knowledge and assumptions and involve risks and uncertainties.
Various factors could cause actual future results, performance or
events to differ materially from those expressed in these
statements and neither Petrofac nor any other person accepts any
responsibility for the accuracy of the opinions expressed in this
presentation or the underlying assumptions. No obligation is
assumed to update any forward-looking statements.
For further information contact:
Petrofac Limited
+44 (0) 207 811 4900
Jonathan Yarr, Head of Investor Relations
jonathan.yarr@petrofac.com
Alison Flynn, Group Head of Communications
alison.flynn@petrofac.com
+44 (0) 207 811 4913
Tulchan Communications Group
+44 (0) 207 353 4200
petrofac@tulchangroup.com
Martin Robinson
NOTES TO EDITORS
Petrofac
Petrofac is a leading international service provider to the
energy industry, with a diverse client portfolio including many of
the world's leading energy companies.
Petrofac designs, builds, manages and maintains oil, gas,
refining, petrochemicals and renewable energy infrastructure. Our
purpose is to enable our clients to meet the world's evolving
energy needs. Our four values - driven, agile, respectful and open
- are at the heart of everything we do.
Petrofac's core markets are in the Middle East and North Africa
(MENA) region and the UK North Sea, where we have built a long and
successful track record of safe, reliable and innovative execution,
underpinned by a cost effective and local delivery model with a
strong focus on in-country value. We operate in several other
significant markets, including India, South East Asia and the
United States. We have 8,200 employees based across 31 offices
globally.
Petrofac is quoted on the London Stock Exchange (symbol:
PFC).
For additional information, please refer to the Petrofac website
at www.petrofac.com
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ISIN: GB00B0H2K534
Category Code: AGM
TIDM: PFC
LEI Code: 2138004624W8CKCSJ177
OAM Categories: 2.2. Inside information
Sequence No.: 164195
EQS News ID: 1361737
End of Announcement EQS News Service
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