Petrofac to fall short of FY cash targets

Oilfield services firm Petrofac warned on Monday that it would fall short of meeting full-year cash targets after forward payments for multiple contracts failed to be received.

Petrofac stated it would no longer be able to meet its annual forecast of "broadly neutral free cash flow", citing delays in collecting advance payments on new contracts secured in 2023 for the warning.

The London-listed group highlighted that its order backlog was $5.5bn but it noted that it was still required to provide certain performance guarantees for EPC contracts.

As a result, Petrofac stated it was now mulling over offloading some of its non-core assets in an attempt to both bolster its balance sheet and improve liquidity.

Petrofac also revealed that it had tapped finance specialist Aidan de Brunner to join its board as a non-executive director.

"As the group pivots to the execution of the new contracts won in 2023, Aidan will commit a significant portion of his time to supporting the board for a limited period," said Petrofac.

As of 0940 GMT, Petrofac shares had surged 17.58% at 20.05p.

Reporting by Iain Gilbert at Sharecast.com