Oilfield services provider Petrofac Ltd. said on Dec. 17 it expected a more than 5% fall in full-year revenue, as delays in bidding processes hit new orders for its engineering and construction segment during the second half of 2019.
Shares of Petrofac and its peer Hunting Plc were among the worst performers on the UK midcap index by 2:18 a.m. CST, with both recording losses of 4%.
The U.K.-based company, which designs, builds and operates oil and gas facilities, said revenue for the year ending Dec. 31 would be $5.5 billion, down from $5.8 billion a year earlier.
Backlog stood at $7.4 billion as at Nov. 30, compared to $9.6 billion a year ago, while engineering and construction, Petrofac’s biggest division, alone saw a 26.2% plunge.
Petrofac has been plagued by an investigation into its oil deals in Iraq and Saudi Arabia, which has so far led to a former senior executive pleading guilty to 11 counts of bribery.
The company in August reported a fall in first-half orders, blaming the uncertainty relating to the investigation, after flagging earlier that it missed out on $10 billion worth of contracts globally due to the probe.
On Dec. 17, the FTSE 250 company reiterated that revenue will also decrease in 2020 on the back of low new order intake in recent years.
“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.”
Petrofac’s smaller rival Hunting also set a somber tone in its trading update, saying activity levels in the North American oil and gas industry continued to slow with the rate of decline particularly more pronounced in the onshore market.
Hunting also pointed to weakening of its other markets on the back of global trade disputes, which have so far bruised some of the world’s biggest economies and stoked concerns of a broad slowdown.
“In EMEA and Asia Pacific... some signs of market softening have been observed, as international trade tensions continue to dampen market sentiment,” Hunting said.
Petrofac said new orders to date stood at $3 billion, compared to $5 billion it reported roughly around the same time last year.
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