Belfast Telegraph

Petrofac hails positive start to year despite SFO probe

Petrofac has made a "positive start to the year" despite seeing its backlog of work slip and remaining under investigation by Britain's fraud squad.

The oil services firm said half-year underlying net profit would come in between 135 million US dollars (£106 million) and 145 million US dollars (£114 million), with full-year profits "weighted to the second half of the year".

Its backlog of work was lower at 13 billion US dollars (£10 billion) at the end of May, in contrast to 14.3 billion US dollars (£11.2 billion) at the end of December last year.

New orders stood at 1.7 billion US dollars (£1.3 billion) for the year to date.

Group chief executive Ayman Asfari said: "We have made a positive start to the year, driven by good project execution and financial discipline.

"Our core business continues to trade in line with expectations and we remain competitive, securing new contract awards in both our E&C and EPS divisions throughout the last six months.

"The high level of tendering activity is evidence of greater confidence in our core markets and we continue to have a very good pipeline of bidding opportunities."

It comes after the firm's chief operating officer Marwan Chedid was suspended and resigned from the board in May after the Serious Fraud Office (SFO) launched a probe into the firm's activities under suspicion of bribery, corruption and money laundering in relation to oil contractor Unaoil.

Mr Chedid and Mr Asfari had been arrested by the SFO and were later released without charge.

Mr Asfari has continued in his role, but has not been involved with the investigation and has had ''no role or responsibilities for engaging with or liaising with agents and consultants''.

Updating on Tuesday, chairman Rijnhard van Tets said: "An independent committee of the board will continue to engage with the SFO and its investigation."

Shares in Petrofac were down more than 2% in morning trading on the London Stock Exchange.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said if new contracts continue to struggle then Petrofac's order book would "drain away".

He said: "The Serious Fraud Office investigation will continue to drive Petrofac shares in the near term, but our bigger worry is the state of the group's order book.

"Oil prices may have stabilised, but E&P companies were too badly scarred by the crash to start splashing large sums on new projects straight away.

"Even the group's impressive cost cutting can't offset a lack of projects to work on."