UK-listed contractor Petrofac has reported a significant increase in net losses for the first half of 2024, with figures reaching £121 million.
This marks a concerning trend for the company, as losses have expanded from £136 million during the same period last year.
“The first half of 2024 was another challenging period for Petrofac, set against the backdrop of a restructuring process which aims to put the business in a stronger financial position,” said group chief executive officer Tareq Kawash.
Despite these challenges, Petrofac maintains a substantial order book valued at £8 billion.
However, the company’s debt position has deteriorated, with net debt rising to $622 million as of 30 June 2024, compared to $583 million at the end of 2023.
Restructuring Plans
In response to its financial difficulties, Petrofac is actively pursuing a comprehensive restructuring strategy.
The company has reached an in-principle agreement with key stakeholders on a framework designed to strengthen its financial position.
This plan includes converting the majority of existing debt into equity, securing new long-term funding, arranging alternative performance security requirements with key clients, and reducing guarantee requirements for new contracts.
Kawash said: “While this has impacted the Group’s performance during the first half, our new projects are performing well, and we continue to make progress in closing our legacy contracts in E&C.”
Despite the company’s financial struggles, Petrofac sees potential for recovery and growth. Kawash noted, “The markets we operate in remain robust and we have secured a good level of new order intake in Asset Solutions.”
The company is moving forward with its financial restructuring, which is expected to provide a more stable foundation for future operations.
“The board is grateful for the support of our stakeholders during this period and remains focused on delivering the best possible outcome for Petrofac and capitalising on the opportunities ahead of us,” Kawash added.
As Petrofac navigates through this challenging period, the success of its restructuring efforts will be crucial in determining the company’s ability to leverage its substantial order book and market position to reverse its financial fortunes.
