OIL services firm Petrofac yesterday reported a better-than-expected 32 per cent hike in first-half profits but its shares fell more than 5 per cent after warning that a number of contracts had been delayed into next year.
The group, which designs and builds oil and gas infrastructure around the world, said it was difficult to attribute the slowdown in contract awards to just one factor, and it remained confident of delivering profit growth of “at least” 15 per cent for the full year.
Numis analyst Sanjeev Bahl said contract awards may have been delayed in the Middle East because of the Muslim holy month of Ramadan, which ends next week. He said: “Management have suggested the potential for a flurry of larger awards post-Ramadan.”
For the six months to the end of June, net profits rose to $325.3 million (£207.7m), up from $246.3m a year earlier and ahead of analysts’ expectations.
Revenues at the group, which has bases in Aberdeen and Montrose, rose 20 per cent to $3.2 billion the interim dividend increasing by 21 per cent to 21 cents per share.
The group’s order backlog stood at $8.9bn as at 30 June, with a further $1.5bn of awards waiting to be signed, and Jonathan Jackson, head of equities at Killik & Co, said Petrofac was “well-placed for the long term to meet increased demand for new infrastructure to meet rising energy needs”.
Chief executive Ayman Asfari said the contract delays would not affect the firm’s target of more than doubling its 2010 recurring group earnings by 2015.
He added: “Whilst these delays impact the expected level of 2012 new orders for onshore engineering and construction, we continue to expect our strategy to deliver earnings growth in 2013 and beyond.
Shares in Petrofac closed down 81p, or 5.2 per cent, at 1,486p.