Petrofac remains on growth track

Oil and gas facilities provider Petrofac had a strong start to 2011 and remains on course to deliver like-for-like net profit growth over the full year of at least 15 per cent - as previously guided. Accounting for specific earnings drivers that benefited the first half, second-half profits are expected to be lower. But, beyond this year, chief executive Ayman Asfari remains confident that the group will achieve its medium-term growth target of more than doubling its recurring 2010 earnings by 2015.

Order intake in the six months of $2.2bn (£1.3bn) increased total backlog - orders and the uncompleted portions of lump-sum contracts - to $11.4bn. This provides substantial revenue visibility beyond the year-end, even if backlog is no longer growing at the rate of recent periods. Chief financial officer Keith Roberts expects backlog to remain stable this year as the group looks to consolidate and deliver on projects.

The core engineering and construction division accounted for $1.6bn of the new orders, winning contracts in Algeria, Iraq and Malaysia. The offshore engineering and operations division has also been successful in winning new contracts, including one to provide maintenance services to BP at the Rumaila oil field in Iraq. Record offshore engineering activity included significant progress on the $280m contract to develop the SEPAT offshore early production system and upgrade of the Berantai floating production and storage facility, both in Malaysia.

The recently structured integrated energy services (IES) division, led by former BP exploration chief Andy Inglis, is an evolution of the energy developments division from which EnQuest demerged last year. Whereas the energy developments unit invested mostly through production sharing contracts and booked oil reserves, like a traditional oil company, IES will focus on long-term production enhancement contracts, where it is geared to operational performance but doesn't book reserves.

Prior to these results, Evolution Securities was forecasting full-year pre-tax profit of $649m and EPS of 145¢.

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