Energy service giant Petrofac shrugged off a 44% slump in profits today, highlighting a record year for new orders.
Chief financial officer Tim Weller told the Press and Journal new work for its engineering, construction, operations and maintenance (ECOM) division during the first half of 2014 was worth more than £4.3billion.
By June 30 the Ecom order book was worth in excess of £12billion, up by 35% over the six months, he added.
Mr Weller said ageing infrastructure in the North Sea made the region a buoyant market for operations and maintenance projects, with work on new developments harder to find.
Much of the order book growth has come from demand for Petrofac’s services in the Middle East and north Africa.
Petrofac stuck to its May guidance for an 11% fall in full-year profits to £350million to about £362million because of problems affecting its integrated energy services (IES) arm.
These included a delay in the construction of a floating production platform in Gdansk, Poland, for Ithaca Energy’s Greater Stella Area North Sea development.
Mr Weller said he expected the £27million semi-submersible facility, FPF1, to “sail away” from Gdansk in the spring, with first production from Greater Stella – in the central UK North Sea – anticipated in mid-2015.
Petrofac, which last week announced the sudden departure of chairman Norman Murray for “compassionate” reasons believed to be linked to a family illness, posted first half net profits of £82million.
This was down from £146.5million a year earlier, with the performance hit by the FPF1 delay and also lower than expected production at the firm’s Ticleni project in Romania.
Pre-tax profits plummeted to £113.3million, from £180.8million previously, on revenue down by 11% at £1.5billion.
Chief executive Ayman Asfari said: “In ECOM, we have already had our most successful year for new awards – bid at margins consistent with our medium-term guidance, reflecting ongoing high levels of investment by our customers in our core geographic markets and our strong competitive position.
“Our pipeline of bidding opportunities remains attractive and we are confident of securing a number of further awards and contract extensions during the second half of the year.”
He added: “In IES, we are making good progress on addressing project performance issues and the delivery of key operational milestones.”
Petrofac said it was monitoring the current turmoil in Iraq, where its operations south and east of Baghdad “represent less than 5%” of the group’s expected revenue for 2014.
First half North Sea highlights included a two-year contract extension for Total for technical services on the Alwyn and Dunbar platforms and a renewal of Petrofac’s duty holder contract on the Kittiwake platform to the end of 2014, following the transfer of the asset to new owner EnQuest.
Petrofac also secured a 10-year operations and maintenance contract, worth £375million, with EnQuest that will see it continue to provide operations and maintenance services on the Thistle, Heather and Northern Producer assets as well as on the EnQuest Producer floating production, storage and offloading vessel.