Energy infrastructure specialist Petrofac (PFC) has followed up its profit warning in June with confirmation in the half-year results that Covid-19 and the oil price crash will have far-reaching consequences. It saw work disrupted because of the virus and curtailments due to delayed spending on new projects. Receivables and average payment time went up in the period as well, as clients’ earnings fell in the weaker oil price conditions.
Petrofac also confirmed it would not pay a dividend this year, after cancelling its final dividend for 2019 in response to the pandemic. It said it was on track to reach $125m (£96.1m) in cost-cuts this year and up to $200m in 2021. The key backlog figure, which looks at expected revenue from existing contracts, fell $1.2bn from a year ago to $6.2bn. One major blow was the termination of a $1.5bn contract with the Abu Dhabi National Oil Company.
Looking on a country-by-country basis, the only real improvement year on year was in Thailand, which saw sales increase by almost five times to $280m. Saudi Arabia actually represented a top-line cost of $50m for the company in the first half. Last year, Petrofac lost contracts in Saudi Arabia as a result of a Serious Fraud Office investigation, which is ongoing.
Consensus forecasts compiled by FactSet are for full-year adjusted earnings per share at 30¢, compared with 80¢ last year.
| PETROFAC (PFC) | ||||
| ORD PRICE: | 177p | MARKET VALUE: | £595m | |
| TOUCH: | 176-178p | 12-MONTH HIGH: | 460p | LOW:133p |
| DIVIDEND YIELD: | NA | PE RATIO: | NA | |
| NET ASSET VALUE: | 172¢ | NET DEBT: | 3% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2019 | 2.82 | 193 | 41.2 | 12.7 |
| 2020 | 2.10 | -48 | -23.2 | nil |
| % change | -25 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=$1.32 | ||||
