Petrofac sees modest free cash outflow and lower net debt


June 28, 2022

Credit: Petrofac

Oil services provider Petrofac Ltd said on Tuesday it expects modest free cash outflows in 2022 due to delays in cash collections from customers, although it expects net debt to be reduced in second half of 2022.

Shares of the company jumped nearly 5% in early trading.

Petrofac also said its net debt had doubled to $345 million, as of June 23, following the payment of a fine to Britain’s Serious Fraud Office (SFO) and a slowdown in customer payments.

The company was fined $104 million last year after pleading guilty to bribes related to contracts in Iraq, Saudi Arabia and the United Arab Emirates between 2011 and 2017.

In the second half of the year, Petrofac expects revenue from its Asset Solutions unit to be higher, supported by strong order intake since the start of the year.

“We have a healthy 18-month group bidding pipeline and expect to secure significant new orders in 2023, supported by opportunities in the UAE and off the coast wind,” chief executive Sami Iskander said in a statement.

The company, which has drawn a line under SFO investigations, said its half-year trading was in line with expectations as a rise in oil prices boosted demand.

(Reuters – Reporting by Amna Karimi in Bengaluru; Editing by Sherry Jacob-Phillips and Uttaresh.V)

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