LONDON (Alliance News) - Petrofac Ltd Tuesday posted a sharp drop in net profit on the back of decreased revenue in the first half, though the group reiterated its year is weighted to the second half and said its engineering, construction, operations and maintenance (ECOM) business posted record order intake in the period.
The FTSE 100-listed oil services company said net profit for the six months to June 30 was USD136 million, sharply down from the USD243 million posted a year earlier. That came on the back of a fall in revenue in the period to USD2.5 billion from USD2.8 billion last year. The group said it remains on track to deliver net profit of USD580-600 million for the full year, in line with previous guidance.
Petrofac said it expects revenue and net income to recovers substantially in the second half of the year as it moves into the execution phase on a number of major projects, adding it remains confident of securing new contracts and extensions during the period.
On the back of its confidence for the second half, the company said it would pay an interim dividend of 22 cents per share, in line with the interim dividend paid in 2013.
In its ECOM business, Petrofac said its order intake in the first half hit USD7.2 billion, taking its total order backlog up 35% to reach USD20.3 billion at the end of June. The firm said its ECOM business is performing in line with expectations, and said its integrated energy services (IES) arm was making progress in addressing performance issues.
For ECOM, the group said order intake in the first half for its onshore engineering and construction operation was USD4.5 billion, boosted by new contract wins in Kuwait, Oman and Algeria. In its offshore projects and operations segment, it saw a number of extensions in the first half for services in the North Sea, including wins from Total SA and Enquest PLC.
In its engineering and consulting unit within ECOM, the group won its biggest contract to date in the period, a USD1 billion engineering project in Oman for the Rabab Harweel Integrated Project facility.
In its IES business, the group said it reached an agreement during the period with AIM-listed Bowleven PLC to terminate the pair's strategic alliance.