Petrofac shares gain in London

Shares of Petrofac surged on Wednesday after the oil services company said its backlog last year grew by 10 per cent to a record US$20.7 billion, thanks to project awards in the Middle East and North Africa.

The London-listed group’s shares gained 7 per cent, reaching 795 pence in morning trading on news of its strong order book.

“We enter 2016 with a renewed focus on our core strengths,” said Ayman Asfari, the group chief executive, in a statement. “The group’s backlog stands at record year-end levels, giving us excellent revenue visibility for 2016 and beyond.”

The company, which has offices in Abu Dhabi and Sharjah, said it secured US$6.1 billion in orders in its onshore engineering and construction division, mainly from new project awards in Kuwait and Saudi Arabia.

While the company has been successful at securing new ­orders, its profitability has been hurt by problems with Laggan-Tormore, a gas plant project on the Shetland Islands, off the coast of Scotland, because of weather delays and higher costs.

The company last year reported a 24 per cent fall in net profit to $440 million, before the loss from Laggan-Tormore, from $581m a year earlier, the company said. Net profit after accounting for the loss was $9m last year.

Revenue increased by 10 per cent to $6.8bn last year from $6.2bn in 2014.

“Our results for 2015 were adversely affected by the Laggan-Tormore project on Shetland,” said Mr Asfari.

“However, we faced up to the exceptional challenges we encountered and honoured our commitment to our client. With the plant now successfully operational, these issues are finally behind us.”

The company, which cut costs by $80m last year, is targeting further savings of $90m this year.

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