Half Year 2024 Petrofac Ltd Earnings Call Transcript
Key Points
- Petrofac Ltd (POFCF) has reached an in-principle agreement with key stakeholders for a comprehensive financial restructuring, which will strengthen the balance sheet and improve liquidity.
- The company secured significant new award intake in asset solutions, with strong order intake of $0.9 billion in the first half of the year and over $1 billion year-to-date.
- The Thai Oil Clean Fuels project is progressing well in its construction phases.
- Petrofac Ltd (POFCF) has a robust pipeline of opportunities, with $53 billion of contracts due for award over the next 18 months.
- The asset solutions division has maintained good momentum in new awards, including contracts with Turkmengas, GE Petrol, 1Gas, and BP.
- The company reported a first-half EBIT loss of $106 million, reflecting lower levels of activity and unrecovered costs in the E&C legacy portfolio.
- Free cash outflow was $36 million in the first six months, and net debt increased to $622 million.
- The financial performance was constrained by the ongoing difficulties in securing guarantees and closing out commercial settlements in the E&C division.
- The restructuring process is complex and involves significant risks, including the need for interconditional agreements from multiple stakeholders and shareholder approval.
- The company's financial position has led to some contracts dragging longer than expected, impacting operational efficiency.
Good morning and welcome to Petrofac's half year results presentation. Our call today is being hosted by James Boothroyd, Head of Investor Relations; Tareq Kawash, Group Chief Executive; and Afonso Reis Sousa, Chief Financial Officer.
I will now hand over to James to begin the presentation. Please go ahead.
Thank you, and good morning, everybody. Thank you for joining us today. I'm James Boothroyd, Head of Investor Relations. Our call today is being hosted by Tareq Kawash, as you just heard, and Afonso Reis Sousa, and includes a Q&A session.
In a moment, I'll hand over to Tareq. But first, I would like to point out that we have uploaded materials to the Results section of our website, including the interim financial statements and a presentation deck, which you can read through alongside this call. However, we will not be walking through the slides in sequential order.
I would also like to remind everyone that today's briefing and some of the questions to your answers
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