Better-than-expected profits prompted celebrations at Petrofac, but the City was in no mood to party after the oilfield services firm warned that orders in core markets were being delayed into next year. Its shares tumbled almost 5 per cent and upside could be limited until we get a better idea of the likely outcome for 2013.
It's the Middle East – particularly Iraq and Saudi Arabia – that's the problem. Hold-ups mean the order book for onshore engineering & construction work fell $1.8bn (£1.15bn) to $4.6bn, and the backlog is now expected to remain "broadly flat" for the rest of 2012. That dented the group order book, too – down 18 per cent at $8.9bn. Still, $1.5bn of contracts just need signatures and visibility is better at the offshore division.
Management also predict growth in the onshore engineering backlog in 2013 and, despite delays, are still on track to grow net profit by at least 15 per cent this year following a 32 per cent jump in the first half to $325m. Much of that growth came from the smaller integrated energy services (IES) division following the sale of a stake in the FPF1 floating production facility.
Investec Securities expects adjusted pre-tax profit of $832m for the full year, giving adjusted EPS of 188¢ ($684m and 158¢ in 2011).
PETROFAC (PFC ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,478p | MARKET VALUE: | £5.11bn | |
| TOUCH: | 1,476-1,478p | 12-MONTH HIGH: | 1,784p | Low: 1,086p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 367¢* | NET CASH: | $775m | |
| Half-year to 30 un | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 2.71 | 300 | 72.7 | 17.4 |
| 2012 | 3.24 | 413 | 95.6 | 21.0 |
| % change | +20 | +38 | +31 | +21 |
Ex-div:19 Sep Payment:19 Oct *Includes intangible assets of $298.7m, or 86¢ a share £1:$1.57 | ||||
