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Petrofac reports higher half year profit, wins $600 million contract

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By Reuters

(Reuters) – Petrofac Ltd’s <PFC.L> profit jumped about 20 percent in the first half of 2018, led by stronger demand for oilfield services, the British-listed firm said on Wednesday, while also announcing a $600 million engineering contract in Algeria.

To increase focus on its core operations of onshore engineering, drilling and other oilfield services, Petrofac has sold off roughly $800 million in mostly oil-producing assets this year alone.

The company said it was returning 12.7 pence per share to investors in an interim dividend, identical to the amount it paid out a year ago.

Petrofac’s refocus on its core service business follows a troubled series of investments in oil production and has come at a time when energy producers have begun to spend more thanks to a recovery in crude prices, ending a period of aggressive cost cuts by producers.

The company, which designs, builds, operates and maintains oil and gas facilities, said its order book rose 22.2 percent to $3.3 billion at the end of the first half of 2018, thanks to its shift in strategy.

It said it was trading in line with expectations in its core businesses.

The group is well placed on several bids due for award before the end of the year, it said. Petrofac also said separately it had won a contract worth $600 million at Algerian state-owned company Sonatrach to provide engineering, procurement and construction services in the North African country.

Petrofac’s net profit, excluding a more than $200 million expense related to the sale of some oil-producing assets, climbed to $190 million in the six months ended June 30, from $158 million a year earlier. Including the charge, Petrofac reported a net loss of $17 million, compared with a profit of $70 million a year earlier.

(Reporting by Muvija M in Bengaluru; Editing by Sai Sachin Ravikumar)