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Petrofac expects 70% revenue slump in engineering and construction division

The engineering and production services division is expected to perform in line with last year

Petrofac Limited - Petrofac expects 70% revenue slump in engineering and construction division

Petrofac Limited (LON:PFC) warned its engineering and construction division was significantly hit by the weak oil market.

As a result, revenues for the half-year to June 30 are expected to tank by 70% to US$1.6bn compared to last year.

READ: Petrofac set for another round of cost cutting as most of 2020 projects roll into 2021

The pandemic caused lump-sum projects in Iraq and India to be suspended, while other activity was materially slowed down and will be pushed back to next year.

In the year to date, new orders secure are US$400mln, against last year’s US$1.6bn.

Revenue for the engineering and production services division is expected to be US$450mln, in line with last year, as operations and maintenance activity continues in all regions.

The firm has so far secured US$600mln of awards and extensions in the year to date, while last year they were US$200mln.

In the integrated energy services, net production is expected to grow 5% to 2.2mln barrels of oil equivalent (boe), for average realised oil price of US$39 per boe, 43% lower than last year.

Group order backlog was US$6.4bn on May 31, while net debt was US$139mln.

Shares slipped 7% to 203.88p early on Wednesday.

--Adds shares--

Quick facts: Petrofac Limited

Price: 173.8 GBX

LSE:PFC
Market: LSE
Market Cap: £599.46 m
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