Petrofac has posted impressive full year 2011 financial results, notifying the markets of a revenue jump of 33% to US$5.8 billion (2010: $4.4 billion), and recording net profit up 25% to $539.4 million (2010: $433 million)
The company also announced a project backlog of $10.8 billion at 31 December 2011, and a cash balance of $1.5 billion at year end.
Ayman Asfari, Petrofac’s Group Chief Executive commented on the final results: “I am very pleased to present another excellent set of results. 2011 has been an important year for us, with good operational performance across our portfolio of projects, the rolling out of Integrated Energy Services (IES) and positive initial progress in delivering our IES strategy.
“During the year we also set out our medium-term target of more than doubling our recurring 2010 Group earnings by 2015. The extensive pipeline of new bidding opportunities, our strong financial position together with our differentiated and competitive offering and proven track record in project execution increase our confidence in achieving that goal. In 2012, we expect to make further progress towards this ambition, with net profit expected to grow by at least 15%.”
Operational highlights released by the company for its Onshore Engineering & Construction unit included good progress on its full portfolio of projects, including the South Yoloten development in Turkmenistan where its reached the progress threshold for profit recognition.
The company also flagged up the successful completion of the In Salah Gas compression facilities and power generation project in Algeria and the Jihar gas plant in Syria.
New business for the division came in project awards throughout the year in Algeria and Iraq, and the Badra project in Iraq in 2012 to date.
Petrofac’s Offshore Projects & Operations divsion highlights included a number of new contracts and extensions, including US$540 million of FPF1 upgrade and Duty Holder contracts for the Greater Stella Area development in the Central North Sea.
The newly formed IES divisional highlights included the first Risk Service Contract in Malaysia, for development of the Berantai field.
In a corporate statement the company said: “Our backlog gives us excellent revenue visibility for the ECOM division for 2012. Furthermore, we see a strong bidding pipeline for the ECOM division for both the current year and beyond. There are a large number of opportunities in our core markets in the Middle East, North Africa, the Commonwealth of Independent States, particularly the Caspian region, Europe and Asia Pacific. We believe that we can grow our backlog over the medium-term, notwithstanding that we still face significant competition in many of our established markets, to enable us to deliver double-digit average annual growth in revenues, while maintaining our net margins in Onshore Engineering & Construction at around 11% and incrementally growing our margins in Offshore Projects & Operations as we undertake more offshore capital projects.”
It added: “In Integrated Energy Services, we are focused on ensuring that we continue to build our execution track record, with important delivery milestones throughout 2012 on our existing projects. Nonetheless, we expect to bid on new opportunities through structured bidding processes in Mexico, Romania and Malaysia, as well as through direct negotiation with a number of resource holders (both National Oil Companies and International Oil Companies). Following the signing of a co-operation agreement with Schlumberger in early 2012, which will allow us to pursue larger projects and develop at a faster pace, we have shortlisted a number of Production Enhancement opportunities to pursue jointly. We expect to deliver strong earnings growth in IES in 2012, driven by existing projects: commencement of the Mexican Production Enhancement Contracts; profit recognition on the Berantai Risk Service Contract; improving production on the Ticleni Production Enhancement Contract in Romania; and initial profit from the Ithaca transaction.”
The statement concluded that: “Overall, our existing portfolio of projects, the strong pipeline of new bidding opportunities for ECOM and IES, our strong financial position, our differentiated and competitive offering and our proven track record in project execution give us increasing confidence in achieving our medium-term target of more than doubling our recurring 2010 Group earnings by 2015. 2012 should see us make further progress towards that goal, with net profit expected to grow by at least 15%.”
