Tax, investments and pension rules can change over time so the information
below may not be current. This article was correct at the time of
publishing, however, it may no longer reflect our views on this topic.
No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.
Petrofac reported revenues of $2.8bn in the first half, up 1.3% year-on-year. However, an increase in less profitable contracts, cost overruns and higher taxes dented margins, with net profits down 19.4% at $154m.
The board announced an interim dividend of 12.7 cents per share, in line with last year.
The Engineering & Construction (E&C) business saw revenues rise 2% to $2.3bn and net profits fall 16% to $148m. The division won $1.6bn of new contracts during the period including projects in Algeria, Oman and the Netherlands.
Engineering & Production Services (EPS) delivered revenues of $0.4bn in the half, up 4%, with net profits of $23m down 15%. The business won $0.4bn worth of new contracts.
Integrated Energy Services (IES) revenues fell 27% to $99m - although that was driven by disposals, without which revenue would have risen 5%. The underlying growth reflects higher average realised prices and increased production. Reported net profits fell 56% to $7m, although excluding the effect of asset disposals that would represent 147% growth.
The total value of the order book fell from $9.6bn at the start of the year to $8.6bn at the end of the first half. E&C and EPS both saw total back log decline. The group is pitching on $13bn of opportunities in the second half.
The group finished the half with net cash of $69m.
Margins in the key E&C division are now expected to be at the lower end of guidance for the year as a whole, with lower overall profitability in the second half. Revenues are expected to decline in 2020, reflecting the lower order intake in recent years.
Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.
The information on this website is not intended to be advice or a recommendation to buy, sell or hold any investment mentioned. No view is given as to the present or future value or price of any investment, and investors should form their own view in relation to any proposed investment.
Any information which could be construed as “investment research“ has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.
The research material provided on our website is not an offer to buy or sell any of the stocks mentioned. Hargreaves Lansdown accepts no responsibility for any use made of these comments and for any consequences that may result. We cannot guarantee the accuracy or completeness of the information provided and consideration has not been given to the personal circumstances of any investor. Therefore any person acting on it does so entirely at their own risk and must assess the suitability of any investment for their own personal circumstances and individual investment objectives. It is not a personal recommendation.
Although we are not specifically constrained from dealing ahead of any research material we do not seek to take advantage of it before it is provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients (including restrictions on dealing for writers of equity commentary).
Hargreaves Lansdown Fund Managers Ltd (HLFM) manages funds that may hold investments which are the subject of commentary prepared and published by other parts of the Hargreaves Lansdown group. Accordingly, appropriate organisational and administrative controls (including physical and information barriers, known as “Chinese Walls“) are in place between different parts of our business, including our marketing and fund management functions, in order to manage these potential conflicts of interest. For more information please see our Conflicts of Interest policy. HLFM currently manages three funds which hold individual equity securities. Details of the significant shareholdings held by these funds can be found here for the HL Select UK Growth Shares fund, here for the HL Select UK Income Shares fund and here for the HL Select Global Growth Shares fund. Hargreaves Lansdown (Nominees) Limited holds individual securities as nominee on behalf of underlying clients of Hargreaves Lansdown, and does not exercise control over or hold the beneficial ownership of these securities.
We do not intend to provide recommendations to buy, sell or hold particular investments, nor do we provide price targets. Our opinions on particular investments (and the facts underlying them) are valid as at the date of publication, but can change at any time, and we may not update our views on any particular investment on a regular basis. Accordingly such opinions and facts may become outdated or obsolete after the date of publication.
Issued by Hargreaves Lansdown Asset Management Limited, which is authorised and regulated by the Financial Conduct Authority (FCA Register number 115248, see FCA register for registration details) and registered in England and Wales No 1896481. Registered office: 1 College Square South, Anchor Road, Bristol BS1 5HL.
-2.50 (-2.17%)