Petrofac's delayed results reveal $505m loss as talks with creditors continue

Petrofac, the energy services group whose shares are currently suspended, has finally released its delayed annual results for 2023, which showed a net loss of more than half a billion dollars following a "challenging year".

Shares have been suspended since the end of April after the company delayed the release of its 2023 results to allow for more time for an audit, while the company engaged with lenders to restructure its debt.

On Friday, Petrofac reported a net loss of $505m for the 12 months to 31 December, compared with $320m the year before, despite revenues coming in broadly unchanged at $2.50bn.

Losses in the Engineering and Construction division totalled $190m, worse than the $130m guidance given on 29 April.

Nevertheless, 2023 was still one of the group's strongest years in terms of new contract awards, with order intake of $7.1bn.

“2023 was a challenging year for Petrofac," said chief executive Tareq Kawash. "Our financial results reflect additional losses on the legacy contract portfolio, in particular the Thai Oil Clean Fuels contract where we are in negotiations to seek reimbursement of a proportion of the additional costs."

Financial restructuring discussions are still ongoing, the company confirmed, which is "critical" and has "the full focus of the board". Petrofac needs to strengthen its balance sheet, improve liquidity and secure bank guarantees to support current and future EPC contracts.

The company missed a bond payment due on 15 May, for which bondholders provided forbearance until 30 June, and continues to rely on deferrals of contractual amortisation payments from its lending banks.

“The board and management are focused on arriving at a comprehensive refinancing solution as quickly as possible," said chairman René Médori. "We are encouraged by the engagement with the ad-hoc group of noteholders, which we hope demonstrates momentum in this complex process. We remain grateful to all our stakeholders for their patience and continued support of Petrofac.”