Petrofac announces positive year-end results

Oil and gas facilities provider Petrofac (PFC) today said its net profit for the year was in line with expectations, with like-for-like year-on-year growth of at least 20%.

In its pre-close trading update the FTSE 100-listed firm said it expected order intake for the year to 31 December to be $4.4 billion. This will result in a year-end backlog of around $8.4 billion, up from $8.1 billion in the same period last year.

Gross cash balances were down slightly on last year's figure at $1 billion compared to $1.4 billion for the year to 31 December 2009.

Shares were up nine points in early trading at 1,498p.

The group said it had continued its excellent performance with good progress on its portfolio of projects. This included handover of the Ebla gas plant in Syria and of two out of three of its In Salah gas compression stations in Algeria.

It also said it had undertaken substantial completion of the Jihar gas plant in Syria, the Harweel enhanced oil recovery plant in Oman and the Mina Al-Ahmadi refinery pipelines in Kuwait.

Due to this the firm expects to deliver a net profit margin in 2010 ahead of its medium-term guidance of around 10%. It said it has good current prospects in both its core markets and in emerging markets such as Turkmenistan and Iraq.

In an update on the South Yoloten project in Turkmenistan, Ayman Asfari, group chief executive of the company, said: "Although the conversion process has taken longer than originally expected we remain confident of moving into the EPC phase of the South Yoloten project in Turkmenistan. Should conversion not occur until 2011, we still expect to close 2010 with record levels of year-end backlog."

The firm said its offshore engineering and operations business had been successful in securing a number of contract extensions and awards during the year. Its most notable one was the $800 million EPC contract for the development of the Laggan Tomore gas processing facility on Shetland.

Engineering services presented a slight drag due to a subdued year in terms of work for external customers, but Petrofac said it expected to see a recovery as it moved into 2011.

In a year of successful acquisitions, the most recent being a 20% stake in Gateway Storage Company to develop the Gateway gas storage project in the East Irish Sea, the group pointed to investments in Seven Energy in Nigeria and the Goldeneye gas field in the North Sea.

A breakdown of the backlog showed that $5.7 billion came from engineering and construction and $2.7 billion came from the other business units. This excludes the potential award of the South Yoloten project.

The firm expected its fully audited results to be available on 7 March 2011.