A step-up in activity at Petrofac's (PFC) onshore engineering and construction (OEC) business underpinned a surge in revenues at the half-year mark. However, the group's troubled Laggan-Tormore gas plant project - located in the Shetland Islands - will weigh on profits to the tune of $306m (£195m) this year. The group confirmed that commissioning of the project, which has been plagued by wild weather and the threat of industrial action, is "well underway". But Laggan-Tormore still forced the group to report a first-half net loss of $133m, against a profit of $135m for the 2014 half-year.
Even stripping out the impact of Laggan-Tormore, Petrofac's performance was somewhat disappointing: net profit before exceptional items came to $130m, down from $136m. Importantly, however, the phasing of project delivery, particularly in OEC, means that earnings will be significantly weighted to the second half this year.
Shareholders can also take heart from a strengthening order backlog, which increased 11 per cent to $20.9bn. In January Petrofac announced that it was heading a consortium to work on the Kuwait Oil Company's (KOC) Lower Fars heavy oil development, which should eventually generate around $3bn for Petrofac. And after the period-end the group received a separate contract award from the KOC worth in the region of $780m.
JPMorgan Cazenove expects adjusted EPS of 68¢ for the full year, against 167¢ in 2014.
| PETROFAC (PFC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 752p | MARKET VALUE: | £2.6bn | |
| TOUCH: | 750-752p | 12-MONTH HIGH: | 1,203p | LOW: 594p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | na | |
| NET ASSET VALUE: | 430¢* | NET DEBT: | 69% | |
| Half-year to 30 June | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 2.54 | 188 | 40.1 | 22 |
| 2015 | 3.18 | -183 | -53.5 | 22 |
| % change | +25 | - | - | - |
Ex-div: 17 Sep Payment: 16 Oct £1 = $1.57 *Includes intangible assets of $225m, or 65¢ a share. | ||||
