Petrofac shares jump on confident outlook - UPDATE

27th Aug 2013 07:13

Petrofac's share price surged on Tuesday as the oilfield services group reiterated its guidance for the full year despite reporting a decline in revenues and profits in the first half.Results for 2013 are still expected to be significantly weighted towards the second half, as previously indicated, "reflecting the phasing of project delivery". As such, it still anticipates to deliver "modest growth" in net profit this year - net profit came to $632m in 2012, up 17% year-on-year.The firm said it had made a "good start to the year" operationally and that the bid pipeline opportunities for the future remain strong. Markets were also pleased by the firm's comments about the Mexico where it is seeing increased investment in oil and gas projects as the nation opens up its energy industry.The stock was up 7.78% at 1,363.36p by 15:20 on Tuesday afternoon.Revenue totalled $2.79bn in the six months ended June 30th, down from $3.19bn the year before, due to a large fall in Petrofac's largest division, Onshore Engineering & Construction, which accounts for over two-thirds of group sales. This reflected the scheduling of recent contract awards and the rephasing of the In Salah southern field developments in Algeria which were hit by a terrorist attack in January. The company evacuated its staff on a temporary basis following the attack.Net profit fell from $326m to $243m and pre-tax profit dropped from $413m to $300m, while the operating margins fell from 12.9% to 10.6%.Despite the year-on-year declines, results beat consensus estimates on most fronts, with analysts expecting revenue of $2.70bn and net profit of around $234m."Operationally, we have made a good start to the year on our portfolio of projects and we have built good momentum in securing new awards," said Chief Executive Ayman Asfari."We look ahead with confidence in our ability to deliver a strong second half performance and achieve our guidance of modest growth in net profit for 2013."The company raised its interim dividend by 5% from 21 cents per share to 22 cents.In a separate statement, Petrofac said it has been awarded a second contract by Gazprom Neft Badra BV worth $95m for work on the Badra Oil Field, 160km southeast of Baghdad.BC