PETROFAC, the global oil and gas engineering and facility-management group, reports its annual results on Monday with revenue expected to be about £2.31billion and pre-tax profits £260-£270million.
Earnings per share are expected to be 59-65p depending on currency movements.
The group’s fourth-quarter trading update was positive, with management expecting net income to be up at least 25% for the full year, compared with previous guidance of 20%. The difference comes from a very strong performance in the engineering and construction division. Meanwhile, engineering and operations has shown signs of slight improvement, benefiting from an increase in re-tendering of contracts, particularly in the North Sea.
The most recent news from Petrofac was the proposed demerger of its UK continental shelf oil and gas assets, announced on Thursday. It is proposing to spin off Petrofac Energy Developments and combine it with the UK arm of Lundin Petroleum.
Following completion of the demerger, Petrofac will continue to focus on facility services with a clear “build-and-harvest” strategy whereby it will seek to take advantage of opportunities to sell or swap particular assets as it sees fit and after it feels it has added value.
Progress from 2010 onwards will depend heavily on new contract wins, with net margins on any new awards key to its future success.
Alan MacPhee is an investment manager at broker and wealth manager Brewin Dolphin in Aberdeen