Petrofac swings to full-year loss as sales slide

Petrofac’s chief executive said the oilfield services company needs to “do better to restore confidence” as the group, which remains under investigation by the UK’s Serious Fraud Office, swung to a loss for 2020 and posted a nearly $1.5bn reduction in revenues.

Sami Iskander, who took over from Petrofac’s longstanding chief executive Ayman Asfari in January, said the start to this year had been “challenging” after the Abu Dhabi National Oil Company last month suspended it from competing for contract awards until further notice.

The decision by a key client came after a former Petrofac employee pleaded guilty in January to three further bribery offences as part of an SFO probe into the London-listed company.

Petrofac swung to a $180m net loss last year compared with a $73m profit in 2019 as revenues slid by almost $1.5bn to $4.1bn as a sharp plunge in oil prices led to energy companies delaying projects and taking an axe to spending. Petrofac’s order backlog at the end of 2020 was $2.4bn lower than the $5bn of 12 months earlier.

The company booked higher exceptional items, including adjustments related to its sale last year of its remaining 51 per cent stake in its Mexico business to Perenco. Petrofac said in its full-year results that the amount received for the stake was lower than expected and it has started legal proceedings to recover a “disputed consideration of $80m”.