June 26, 2018 / 6:26 AM / 5 months ago

Petrofac posts higher orders as demand picks up

(Reuters) - Oilfield services firm Petrofac Ltd (PFC.L) on Tuesday reported a 5.9 percent increase in new orders and said it was trading in line with expectations, due to higher demand.

There has been a recovery in the demand for oilfield services after a period of softness caused by a drop in oil prices, which forced explorers and producers to cut capital expenses and defer or cancel contracts.

“We are well-positioned on several bids and tendering activity remains high with around $20 billion (15.06 billion pounds) of bid opportunities due for award in the second half of the year,” said Chief Executive Officer Ayman Asfari.

The company said the new order intake stood at $1.8 billion since the start of 2018, compared to $1.7 billion reported at the same time last year.

The company said net debt was expected to be around $900 million at June 30, in line with its expectations.

The UK’s Serious Fraud Office (SFO) questioned Petrofac’s top executives last year in connection with a probe into Monaco-based Unaoil on suspected bribery, corruption and money laundering.

The company suspended its chief operating officer, Marwan Chedid, in response to the investigation.

Investors had feared the SFO investigation and Chedid’s suspension could hurt Petrofac’s ability to win work.

The stock fell 44.5 percent amid the probe, but has since regained nearly one-fifth of its value.

“We are well positioned for the second half with good revenue visibility, a strong competitive position and healthy liquidity,” Asfari said.

Petrofac, which designs, builds, operates and maintains oil and gas facilities, said backlog was $9.7 billion at May 31, below the $13 billion at the same time last year.

Reporting by Muvija M in Bengaluru; Editing by Bernard Orr

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