Petrofac sees profits surge by a quarter

City A.M. Reporter
BRITISH oil services firm Petrofac said it was confident it would win new contracts this year, a must to put it on track to meet its growth targets, after it posted a forecast-beating 25 per cent jump in profit in 2011.

Petrofac said it was seeing a strong pipeline of opportunities across both parts of its business – designing and building oil and gas infrastructure, as well as investing alongside oil firms in oil fields.

The firm shrugged off the impact of what it called “significant competition” in its key Middle East and North African markets.

Petrofac said it expected profit to grow by at least 15 per cent this year, putting it on track to meet its goal of more than doubling 2010 earnings by 2015.

“The confidence in Petrofac’s near term earnings growth relies increasingly on strong order intake in the first half of 2012,” JP Morgan analysts said.

Chief financial officer Tim Weller said: “We’re seeing a lot of activity during January this year.

“We had a very high number of requests for our capabilities in terms of the early stages of contracting processes.

“There is a lot going on in our core markets in terms of new customer investment,” he added. Weller said orders were looking strong for 2012.

But analysts at Oriel Securities said the lack of recent contract awards raised concerns about the company's ability to meet its forecasts.

“We estimate that to underpin our 2013 estimated revenue Petrofac needs to win $8bn of new contracts by the end of 2012. This is starting to look challenging when compared to the $2.1bn of contracts won in 2011.” they said.