Petrofac losses widen amid 'legacy' portfolio challenges

Oilfield services company Petrofac reported a decline in revenue in its results on Thursday, to $2.59bn in 2022 from $3.04bn in the prior year.

The London-listed firm said its EBITDA loss for the year totalled $138m and its EBIT loss came in at $212m, widening from $86m and $189m respectively in 2021.

Its net loss for the year grew to $310m, up from $245m in the prior year.

The company noted that challenges in the engineering and construction (E&C) sector were partially offset by a strong performance in both asset solutions, and integrated energy services (IES).

Petrofac reported a backlog of $3.4bn at the end of the year, and a healthy total group pipeline of $51bn scheduled for award through to June next year.

Its net debt stood at $349m, while it had liquidity of $506m as at 31 December.

The company added that its bank facilities had meanwhile been extended to October 2024.

Despite the challenging year, Petrofac said it had secured a share of a €13bn framework agreement with TenneT, with the first contract awarded in the first quarter of 2023.

“Petrofac’s performance for 2022 was severely impacted by the challenges in the Group’s legacy engineering and construction portfolio, which continues to feel the direct and indirect effects of pandemic delays,” said the company’s new chief group executive officer, Tareq Kawash.

“We are working resolutely to put these challenges behind us, and to rebuild our backlog - such as the recent multi-year, multi-platform framework agreement in support of TenneT’s 2GW offshore wind programme.

“Meanwhile, integrated energy services are performing well, and asset solutions continue to provide us with attractive growth opportunities.”

Kawash said he joined Petrofac because he viewed the business as a “trusted project delivery partner”, with “significant opportunity” for growth and value creation.

“I have known the business for many years and believe strongly in the business model and Petrofac’s differentiated competitive position.

“We have an exceptional engineering, procurement, construction and operations capability that is well-positioned to deliver and support critical energy infrastructure.

“In an increasingly active market, we must be selective and disciplined as we grow our order book over the coming years.”

At 0835 BST, shares in Petrofac were down 3.78% at 61.44p.

Reporting by Josh White for Sharecast.com.