Oilfield services provider Petrofac has revealed a plunge in half-year profits.
Stock dipped more than 2% as investors reacted to a $107 million drop in profits for the six months to June 30.
Shares recovered to close down 0.27%.
Overall, the group posted net profits for the period of $136m, down from $243m, as revenues slid in the period from $2.8 billion to $2.5bn.
However, CEO Ayman Asfari said it had been the most successful year for new contract awards, with the order book climbing 35% from December 31 to stand at a record $20bn.
Petrofac said among the new contracts secured was its largest ever engineering, procurement, construction and installation award from TenneT to provide an offshore windfarm grid connection for the BorWin3 wind farm in the North Sea.
The firm also picked up contract extensions from Total and EnQuest relating to assets in the region.
Petrofac said the backlog of work gave it “very good revenue visibility for the rest of this year and beyond”, and confirmed previous full-year profit guidance of between $580m and $600m for 2014.
“Activity levels, revenue and net income are expected to increase substantially in the second half of the year as we move into the execution phase on a number of major projects,” the firm said in an interim statement to the market yesterday.
“Our pipeline of bidding opportunities remains attractive and, given our strong competitive position in our core markets, we are confident of securing a number of further awards and contract extensions during the second half of the year.”
Petrofac said it had also made progress addressing performance issues in its Integrated Energy Services division.
Among work being undertaken by the unit is the modification and upgrading of the FPF-1 floating production facility, to be used for offshore processing in the Greater Stella development in the central North Sea.
Petrofac said it had implemented changes to the project to speed up completion of the remaining works ahead of a delayed sailaway next spring.
Mr Asfari said management had now moved to restructure the IES unit’s role in the group.
“Looking further ahead, we have re-focused our IES business development plans, and our innovative venture with First Reserve reinforces the role of IES as an enabler for the Petrofac group, allowing us to concentrate our resources on our core strengths and underlining our commitment to capital discipline.”
The company’s board yesterday declared an interim dividend of 22 cents per share.
It said it expected the full-year dividend to be in line with the 2014 payout.