The Group's backlog decreased 24% to USUSD3.8 billion at 30 June 2021 (31 December 2020: USUSD5.0 billion), reflecting progress delivered on the existing project portfolio and low new order intake in E&C as clients continued to defer awards in response to the COVID-19 pandemic and the uncertain historic outlook for oil demand. Overall, Group order intake year to date was USUSD0.5 billion, representing a book-to-bill of 0.3x.


Backlog (10)                       30 June 2021 31 December 2020 
                                   USUSD billion  USUSD billion 
Engineering & Construction         2.1          3.3 
Engineering & Production Services  1.7          1.7 
Group                              3.8          5.0 
 

Of the total Group backlog, USUSD1.5 billion is currently scheduled for execution in the second half of 2021, comprising up to USUSD1.0 billion in E&C and USUSD0.5 billion in EPS.

Outlook

While market conditions remain challenging, we expect the full year net margin in E&C to be in line with 2020. In EPS, strong performance has led to an increase in full-year net margin guidance to 5.0-6.0%.

Petrofac has a USUSD46 billion bidding pipeline, which includes USUSD7 billion opportunities in new energies, and contract awards are expected to accelerate in 2022. In E&C, while we are prudently assuming that capital discipline by clients will continue to delay awards in 2021, there is a healthy pipeline of USUSD32 billion scheduled for award by the end of 2022. This consists of USUSD10 billion in our core addressable MENA markets (11), as well as significant opportunities in growth geographies including India, Russia and Libya.

EPS is expected to continue to deliver strong order intake in the current year with a book-to-bill for the full year of at least 1.0x. Awards in the second half are expected to be driven by contract extensions in the West and brownfield projects in the East, where we have already secured material contracts in Malaysia and Bahrain since the period end.

We remain confident that the actions we have taken to maximise our cost competitiveness through structurally reducing costs by USUSD250 million relative to pre-pandemic levels, simplifying the organisation and driving digitalisation will best position us in both divisions for the anticipated multi-year recovery in our traditional markets.

In new energies, near-term awards and revenues will continue to be dominated by offshore wind, with three EPC projects currently in execution and USUSD3.4 billion of opportunities in the pipeline. Furthermore, there has been strong growth in other new energy sectors with USUSD3.5 billion of opportunities in the pipeline, supported by the accelerating number of early-stage awards and strategic partnerships secured in carbon capture & storage, waste-to-value and hydrogen.

We have confidence in Petrofac's competitive position and the Group is focused in its pursuit of growth with a strengthened financial position and a clear strategy. Our medium-term ambition is to deliver revenues of USUSD4-5 billion revenue, including c.USUSD1 billion from new energies, with a sector leading 6-8% EBIT margin ambition and a return to a net cash position. These medium-term objectives will deliver significant value to Petrofac shareholders.

Notes 1. Business performance before exceptional items & certain re-measurements. This measurement is shown byPetrofac as a means of measuring underlying business performance 2. Attributable to Petrofac Limited shareholders 3. Net debt comprises interest-bearing loans and borrowings less cash and short-term deposits (i.e. excludesIFRS 16 lease liabilities) 4. New order intake comprises new contract awards and extensions, net variation orders and the rollingincrement attributable to EPS contracts which extend beyond five years 5. Income from associates included a gain of USUSD2.5 million on revaluation of lease receivables due to alease extension on one of the floating production assets 6. In IES, "like-for-like" refers to comparison with 2020 after adjusting for the removal of exited assets 7. Average net realised price is net of royalties and hedging gains or losses. It is based on salesvolumes, which may differ from production due to under/over-lifting in the period 8. Liquidity of USUSD1.0 billion consisted of USUSD0.7 billion of gross cash and USUSD0.3 billion of undrawncommitted facilities 9. Our debt covenant limit is 3.0x net debt (adjusted for net lease liabilities) to EBITDA (12-monthhistoric) 10. Backlog consists of: the estimated revenue attributable to the uncompleted portion of Engineering &Construction division projects; and, for the Engineering & Production Services division, the estimated revenueattributable to the lesser of the remaining term of the contract and five years 11. Core addressable MENA markets currently comprise, Algeria, Kuwait and Oman 12. Court penalty of USUSD106 million based on the GBP:USD exchange rate at 30 June 2021

Click on, or paste the link below into your browser, to view the Group's financial statements for the six months ended 30 June 2021: '2021 HY Report and Accounts'

PRESENTATION

Our half year results presentation will be held at 8.30am today and will be webcast live via:

https://broadcaster-audience.mediaplatform.com/#/event/6171a8f7868121039348a875 ENDS

Disclaimer:

This announcement contains forward-looking statements relating to the business, financial performance and results of Petrofac and the industry in which Petrofac operates. These statements may be identified by words such as "expect", "believe", "estimate", "plan", "target", or "forecast" and similar expressions, or by their context. These statements are based on current knowledge and assumptions and involve risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements and neither Petrofac nor any other person accepts any responsibility for the accuracy of the opinions expressed in this presentation or the underlying assumptions. No obligation is assumed to update any forward-looking statements.

For further information contact:

Petrofac Limited

+44 (0) 207 811 4900

Jonathan Yarr, Head of Investor Relations

jonathan.yarr@petrofac.com

Alison Flynn, Group Head of Communications

alison.flynn@petrofac.com

Tulchan Communications Group

+44 (0) 207 353 4200

petrofac@tulchangroup.com

Martin Robinson

NOTES TO EDITORS

Petrofac is a leading international service provider to the energy industry, with a diverse client portfolio including many of the world's leading energy companies.

Petrofac designs, builds, manages and maintains oil, gas, refining, petrochemicals and renewable energy infrastructure. Our purpose is to enable our clients to meet the world's evolving energy needs. Our four values - driven, agile, respectful and open - are at the heart of everything we do.

Petrofac's core markets are in the Middle East and North Africa (MENA) region and the UK North Sea, where we have built a long and successful track record of safe, reliable and innovative execution, underpinned by a cost effective and local delivery model with a strong focus on in-country value. We operate in several other significant markets, including India, South East Asia and the United States. We have 8,500 employees based across 31 offices globally.

Petrofac is quoted on the London Stock Exchange (symbol: PFC).

For additional information, please refer to the Petrofac website at www.petrofac.com

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Attachment File: 2021 HY Report and Accounts

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ISIN:           GB00B0H2K534 
Category Code:  IR 
TIDM:           PFC 
LEI Code:       2138004624W8CKCSJ177 
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews 
Sequence No.:   125163 
EQS News ID:    1243399 
 
End of Announcement  EQS News Service 
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(END) Dow Jones Newswires

October 26, 2021 02:25 ET (06:25 GMT)