Petrofac expects growth after recommencing In Salah project

Petrofac expects modest growth in net profits this year following the rephasing of its In Salah project in Algeria.

The British oil services firm was forced to temporarily evacuate staff from the In Salah southern filed following a terrorist attack in January. The company excepts to recommence full-site operations during the second half of 2013.

The company said the remobilisation of the site will defer revenue and margin from 2013 to 2014 but will not impact expectations for margins over the life of the project.

"We expect to deliver modest growth in net profit in 2013 reflecting the In Salah rephasing, but remain on target to more than double our 2010 group earnings by 2015," said Chief Executive Officer, Ayman Asfari.

The group is targeting net profit after tax of over $862m in 2015.

Asfari said Petrofac has made a good start to the year with strong operational performance and project margins in line with expectations.

Its Engineering, Construction, Operations & Maintenance (ECOM) division received an order intake of $2.0bn in the year to date, including awards in Abu Dhabi and a pipeline of bidding opportunities for projects in the Middle East and Africa.

The Integrated Energy Services division made progress on field operations in Mexico and on offshore developments in Malaysia.

The group backlog increased to $12.1bn at the end of April from $11.8bn at the end of December, including $9.2bn from ECOM and $2.9bn from IES.

Net debt came to $0.1bn at April 30th, compared to net cash of $0.3bn, due to investments in IES projects and unwinding of cash advances on onshore engineering and construction projects.

"Our strategy for long-term sustainable growth is based on three key drivers: expanding our existing business into new geographies; developing our leading energy performance certificates offering offshore; and delivering on our plans for Integrated Energy Services," Asfari added.

Shares fell 3.01% to 1,321p at 08:31 Thursday.

RD