Petrofac Announce Trading update

Petrofac issues the following pre-close trading update for the year ending 31 December 2021.

Continued strong performance in EPS but Covid-19 disruption continues to impact E&C project schedules and costs
Group net profit broadly in line with market expectations for 2021, supported by tax provision releases of US$17 million in H1 and approximately US$35 million in H2
New order intake (1) of US$2.0 billion in the year to date (increased from US$0.5 billion at half year) with EPS on track to deliver a book-to-bill of 1.0x for the full year
Comprehensive refinancing completed following resolution of SFO investigation
Year-end net debt (2) expected to be broadly flat versus Q3, at approximately US$0.2 billion
On track to deliver cost saving target of c.US$250 million by year-end (3)
Well positioned with a Group pipeline of US$40 billion for award in 2022, of which $7 billion is in New Energies

Sami Iskander, Petrofac’s Group Chief Executive, commented:

“In 2021 Petrofac has taken an important step forward, closing out the SFO investigation and embedding a strategy focused on future growth. During this period we have continued to deliver projects and operations safely for our clients worldwide, despite the ongoing challenges of the Covid-19 pandemic which continue to impact our current E&C portfolio.
“Earlier this year I set out a plan to rebalance, reshape and rebuild Petrofac. The recent refinancing has provided a long-term, stable capital structure for the business and largely completes the work to rebalance the Group. Operationally, we are making good progress in reshaping the organisation to consistently deliver to best-in-class global standards through local execution. Our priority is to now rebuild our order backlog. We secured US$1.5 billion of new awards in the second half to date and the outlook for awards is improving in a more supportive macro environment. Petrofac’s cost competitive model and strong client relationships mean that we are well positioned with a healthy pipeline of opportunities scheduled for award in 2022.

“While challenges will persist in 2022, I remain confident about the prospects for Petrofac over the medium-term as we capitalise on our strong positions in attractive and growing markets and accelerate our progress in New Energies, where we see significant near and long-term growth in exciting areas such as offshore wind, carbon capture, waste to value and hydrogen.”

The Group delivered a resilient performance in the second half of 2021 despite the continued challenges and uncertainty related to Covid-19.  Management expects to report Group revenue of approximately US$3.0 billion and full-year net profit broadly in line with 2020 and with market expectations.  The Group remains on track to reduce gross overhead and project support costs by the targeted US$250 million by the end of 2021, in order to maintain competitiveness whilst preserving core capability 

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