UK's Petrofac sees outlook improving as it rebuilds

By Reuters

<div> <p>By Muhammed Husain</p> <p> -British oil services firm Petrofac said on Thursday it had won new contracts worth $1.5 billion in the second half of the year while flagging lower annual revenue on weakness at its largest division.</p> <p>Petrofac reached a settlement with Britain’s Serious Fraud Office (<span class="caps">SFO</span>) in September after a four-year investigation, which had hindered its ability to secure contracts in key Middle Eastern markets.</p> <p>“Our priority is now to rebuild our order backlog,” Chief Executive Officer Sami Iskander said. </p> <p>“The outlook for awards is improving in a more supportive macro environment,” he added. The company did not provide any details on the new agreements reached in recent months. </p> <p>Petrofac’s measured optimism comes as the oil market has gained globally in recent months, with economic activity rising amid a softening in <span class="caps">COVID</span>-19 restrictions worldwide. </p> <p>Fellow London-listed energy services company Hunting <span class="caps">PLC</span>, which is focussed in the United States, reported an order book that rose 20% for the three months to the end of November.</p> <p>Analysts believe that the order book at Petrofac’s largest division Engineering & Construction (E&C), badly hit by the <span class="caps">SFO</span> probe, can improve given rising activities in the Middle East and North Africa, helping its future earnings.</p> <p>In October, it was handed a fine of more than $100 million after pleading guilty to bribes related to contracts in Iraq, Saudi Arabia and the United Arab Emirates between 2011 and 2017. </p> <p>Petrofac then raised $275 million through a stock sale to cut its debt and pay off the fine.</p> <p>Shares in the company, which have gained some ground since the close of the investigation, were up 3.2% by 1040 <span class="caps">GMT</span>.</p> <p>The company forecasts its annual revenue to come in at about $3 billion, compared with a revenue of about $4.1 billion last year, due to lower revenue at E&C.</p> <p>The outlook is at the lower end of a company-compiled analyst consensus in which they estimated revenue to come in between $3.04 billion and $3.26 billion. </p> <p>($1 = 0.7534 pounds)</p> </div>