Oil and gas services company Petrofac yesterday lost hundreds of millions from its shares value after it warned that its profits next year will fall 25%.
The effect of slowing demand in China and the plentiful US output cutting the price of oil sent shares tumbling by 26%.
The slump made Petrofac the biggest faller in the FTSE 100, and follows Goldman Sachs cutting its forecast for Brent crude by a fifth to $80 a barrel for the second quarter of next year.
Petrofac employs more than 18,000 people at sites across the world, including a major presence in Aberdeen and an emergency training centre at Montrose.
The firm revealed in a trading update that net profit for the current financial year would be at the lower end of the $580 million (£370m) to $600m range it provided in previous guidance.
Net profit next year will fall by about 25% to around $500m, compared with analysts’ expectations of $675m.
The depressed oil price had reduced expected profit for 2015 at its Integrated Energy Services business by about $45m.
Higher costs and delays at projects including the Laggan Tormore and Greater Stella oil fields in the North Sea would also reduce profit.
Chief executive Ayman Asfari said: “This has been a difficult period for Petrofac and the industry.
“The board has analysed the potential impact of a lower oil price environment on our IES business and also made a critical assessment of our expectations for project delivery in 2015.
“In the main our project portfolio is in good shape, but it is clear that on a small number of projects our execution has fallen short of the high standards we set for ourselves.
“We have faced these difficulties and have taken robust action to address them, and believe this leaves us on a surer footing for the future.
“The foundations of the business remain strong. Our Ecom (operations and maintenance) division is in very good shape, with good progress made on the resolution of a number of Ecom commercial settlements, a record level of backlog and an attractive pipeline of bidding opportunities.
“We are implementing clear and robust plans to improve project delivery and drive value from the IES contract portfolio.
“I am confident that Petrofac will meet the challenges presented by certain projects in our portfolio and the medium-term growth prospects for our business remain strong.”
Petrofac has seven operational centres in Aberdeen, Sharjah, Abu Dhabi, Woking, Chennai, Mumbai and Kuala Lumpur and a further 24 offices worldwide.
Petrofac designs and builds oil and gas facilities; operates, maintains and manages facilities; and trains personnel.
It also develops and co-invests in upstream and infrastructure projects.
At Montrose, the Petrofac Training Services centre completed a £1.5m upgrade earlier this year to maintain its capability to provide cutting-edge training solutions to the oil and gas industry.
Petrofac shares fell 315.5p to 877.5p.