Petrofac down on 2020 warning

The share price of FTSE 250 Petrofac (LON:PFC) tumbled 6.51% to 374.90p (as of 15:15 GMT) as it issued a pre-close trading statement. The company said that it expects revenues for next year to drop due to lower orders in recent years.

CEO Ayman Asfari commented: “We remain on course to report good results for 2019 in line with prior guidance, which reflect solid operational performance across the business and continued progress delivering our strategy.

“We are encouraged by the improving market outlook and our busy tendering pipeline, with US$39 billion of bid opportunities scheduled for award by the end of 2020 in both core and growth markets. We have seen delays in E&C bidding processes in the second half of the year, which has further impacted new order intake following the previously announced loss of awards in Saudi Arabia and Iraq in the first half. However, we are well-placed on several opportunities.

“We remain committed to our strategy of best-in-class delivery, enhancing returns and positioning the business for a return to growth. This year we have made further good progress improving cost competitiveness and divesting non-core assets, whilst maintaining a strong balance sheet. Looking forward, the fundamentals of our business remain robust, with an improving market outlook, a strong competitive position and excellent customer relationships. We are therefore investing in maintaining our bench strength and technical capability to position Petrofac for a recovery in new orders in 2020 and future growth“.