Petrofac warned its profits would be slashed by more than 10%.
The firm credited poor performance from its Integrated Energy Services (IES) division, a delay to the Greater Stella Area project, lower than expected production on Ticleni and the dilution of its equity interest in Seven Energy for the slide.
Ayman Asfari, Petrofac’s group chief executive, said: “In IES, following a review of our existing and prospective projects, we are working hard to deliver improvements in operational performance on the existing portfolio and are re-focusing our IES business development plans. We have stepped back from certain business development opportunities and, going forward, we will prioritise IES opportunities which best lever our existing core areas of strength, which offer clear synergies with ECOM, and which deliver attractive returns on capital employed.”
Net profit for the full year 2014 is expected to be between $580million and $600million.
However, Petrofac’s Engineering, Construction, Operations and Maintenance (ECOM) recorded a strong performance.
The firm recently landed a major contract from the German Dutch transmission grid operator TenneT for a major offshore wind project in the North Sea.
Petrofac secured the deal in partnership with Siemens.
The oil and gas service provider will be charged with constructing the offshore installation of the BorWin3 platform, which will later house a Siemens high voltage direct current (HVDC) station. The station will convert the alternating currents produced by wind turbines into onshore energy for the German national grid.
The chief executive added: “We continue to deliver good operational performance in ECOM and we have had a very strong start to the year in terms of new awards, with more than $5.5billion of order intake in the year to date. The group’s backlog stood at record levels of $18.6billion at 31 March 2014 giving us good revenue visibility for 2014 and beyond.”
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