Petrofac shares slip as E&C unit tipped for small loss this year

Shares in Petrofac slipped on Thursday after the company said its engineering & construction operation would report a small loss this year.

The energy industry services provider cited cost overruns and “some relatively unfavourable commercial settlements with clients” in the division.

“These dynamics will largely play out within the year, with a number of projects scheduled for completion over the course of the year and early 2023,” Petrofac said in a trading update.

Notwithstanding short-term headwinds, the company said it was confident that with high current bidding activity and strict bidding discipline, E&C would rebuild its backlog and grow margins over the medium term.

The company added that its asset solutions unit had performed well and full-year earnings before interest and tax were expected to be in line with the 5%-6% guidance range.