Petrofac Live Discussion

marktime1231 17 Dec 2019

PFC disappoints Not so much with the update ahead of 2019 final results this morning which signals financials were in tune with a 400p share price. It was in the sales performance and outlook that it was worrying. Back in June it said it had a full bidding pipeline with prospects of $15B for H2. It must have won less than 10%. Total order intake of $3B is about half what it needs to stay level. Now it says it has a $39B bidding pipeline, but if it only succeeds at the same 10% rate the business will shrink by about 1/3 in 2020, and that gloomy expectation is echoed by the outlook comments. It may sustain a similar or reduced dividend with disposals nominally for the purposes of debt reduction, where they have made progress to be fair. But I have waited long enough for a recovery, some sign that the SFO will back off, some assurance the dividend will be sustained. Sliced a chunk out of my income portfolio this morning taking a rare capital loss, to be replaced with stocks where the I think the yield is more likely to be sustained or grow.

marktime1231 29 Mar 2019

Hopeless pricing Something similar happens on the HL price feed, it happens every day, everything goes haywire at 120 and again at 16:30. You get different prices on different views of the same stock, sell overtakes buy, the data is unreliable until the seizure settles down again a few minutes later. At times the only way to confirm the real price (while the market is open) is to get quotes on dummy trades. I have found it does not help to ask the platform what they are playing at, they do not have a good explanation and say that they get the data from an external source and are not liable for accuracy.

Clitheroekid 22 Mar 2019

Hopeless pricing The accuracy of the pricing on ii is utterly dreadful. I’m looking at my portfolio at present, and it has PFC closing at 517.60, apparently down by 14.80. In fact it closed at 475.00. I very often find that the prices are ludicrously inaccurate, and that I have to cross check them with a reliable site, such as the London Stock Exchange site or Google Finance. God knows why this should be - it surely can’t be that difficult to get the prices at least approximately correct.

marktime1231 13 Mar 2019

Great news of a contract win $1B order won for a new development in Algeria, a terrific answer to those questioning whether PFC was still capable of turning pipeline into business. It was late news while the Spring Statement was going on, but the market reacted very positively with an extra kick up to close at 488p. More to come I should think, oil price sitting up in the $67s, PFC starting to look a serious recovery bet on a p/e of just 6. Opportunity sentiment might outweigh the SFO drag for a while then, and certainly we can ignore the nonsense in Italy where Asfari has not been able to shake off a charge of insider dealing, even though his appeal, on the grounds that he had never been served with charges to defend, seems a reasonable one … and in the meantime the insider dealer counter-party has been found not guilty, er um so …

marktime1231 12 Mar 2019

New punt on improved sentiment Sliced at 464p a chunk bought at 407p three weeks ago, working hard to trade down the loss. Still overweight for the dividend and still in hope of a recovery.

Ripley94 21 Feb 2019

KILLERMANJARROW PFC… XXXXX Gary Newman tipped this on five free tips …12th Feb 2019.

marktime1231 08 Feb 2019

New punt on improved sentiment As a private investor I celebrate my mistakes, and I have had a lot to celebrate - too many to repeat here but they include buying, adding and clinging on to Carillion. In that case I studied it and learned something … eg delve deeper into the accounts, look at how cash positions and reported debt are manipulated, heed respected commentators (in that case Phil Oakley) … to the point where I was sufficiently well informed to be able to advise the Committee enquiry on how Carillion collapsed and who was “asleep at the wheel”. This is not my worst position either, not even after yesterday’s 30% crash - for example I am isolated by my convition that the impact of small claims changes on NAHL financials will be limited and temporary, that it is a well placed well managed business, and that it will continue to deliver dividends in the interim before recovering strongly. I have won on PFC in the past trading cycles between 405p and 863p but even with dividends it now owes me. Morgan Stanley’s rushed out upbeat assessment is presumably to recover its face from an embarassingly positive comment on 16 Jan, many of its important clients will have had strong words. Goes to show you can’t always believe what the company says and that brokers get it wrong too. And definitely don’t believe me, I get it hopelessly wrong pretty often. At least I am making my own mistakes and not paying someone else to make them for me. Waving not drowning not just yet anyway.

hannahxyz 08 Feb 2019

New punt on improved sentiment Worst case scenario (according to HSBC analysts) is increase to 640p per share. A tad optimistic perhaps, but that would do me. GLA Morgan Stanley noted that Petrofac’s shares have underperformed relative to the sector 35% since the initial May 2017 SFO announcement, representing $1.3bn of “lost market value”, with a 60% underperformance since March 2016 when allegations first appeared in the Huffington Post, equating to $2,586bn of lost value. “We continue to believe this will ultimately prove a more than sufficient discount to reflect the outcome of the SFO situation,” analysts said, noting the largest SFO fine was for Rolls Royce in $497m in 2017, 3% of market cap at the time, which represented 258m for repaying profits on deals covered and £239m penalty. Analysts at HSBC put forward three possible scenarios, including one where Petrofac is cleared with no charges, with a resulting estimated fair value for the shares of 830p. A second scenario sees the case settled via DPA, with a $400m fine after discounts and $20m costs, while a third envisions a total case impact of around $1bn including fine and “franchise impact”, resulting in an estimated fair value of the shares of 640p.

Hardboy 08 Feb 2019

New punt on improved sentiment Oh mark! That was a badly timed punt. I guess the fall is because markets think this is the first of several - and others may still be with the firm

mark_t 07 Feb 2019

New punt on improved sentiment I agree that this is going to rumble on and I share the view that some mud is going to stick somewhere now that Lufkin has pleaded guilty. The current board seem to be maintaining their stance that this was all done before them and without their knowledge but who knows. I suspect a fine is coming but it is a question of how large and what impact it has on the order book now and moving forward. I think the company is fundamentally a strong one and once the noise clears the share price will go up - but that all depends on how much more dirty laundry comes out and how long that process takes.

marktime1231 07 Feb 2019

New punt on improved sentiment If David Lufkin was wise to plead guilty he would have been wise to have done so 2 years ago, and cut a deal with the SFO to be transparent about who knew what and when. I thought this was all about Chedid anyway. The board commissioned an expensive legal report two years ago which exonerated Asfari and the current board, was that after Chedid had gone … didn’t stop the SFO expanding its enquiries … but you can’t funnel bribes through an international subsidiary and through commission agents Unaoil without someone in an executive / finance function authorising it, can you? How stupid to get caught, how stupid to risk getting caught after the new bribery legislation came in 2010, how stupid not to plead guilty and co-operate and deal with this at the first opportunity … or, are PFC really going to cling on to the idea that there was no wrong doing that anyone within distance of the board room door knew anything about. So this may have further to rumble. Noting that while the SFO released this at 8am the board of PFC were asleep at the wheel and caught off guard by the announcement, did not get a “Board update” out until 9.52 by when my shareholding had lost 25%. So the board have not handled this well have they. I note that they have stopped protesting innocence and only underline what the SFO has and has not done so far.

mark_t 07 Feb 2019

New punt on improved sentiment Gulp indeed. We are now back at the levels we were when the SFO enquiry was first announced which, at the time, looked like an over-reaction by the market and, IMHO, looks the same now. Hopefully this may bring the SFO saga to a close sooner rather than later and while it looks like there will be a fine of some sort, at least the uncertainty will disappear and the company can get on with it.

marktime1231 07 Feb 2019

New punt on improved sentiment Gulp Oh well oh well oh well

marktime1231 06 Feb 2019

New punt on improved sentiment Doubled up this morning, three successive bits of good news or broker uprates ahead of final results 28 Feb. MS think this is an £8 stock even with the SFO foolery hanging over, “upside potential” outweighs the negatives on a p/e under 8 — so rather speculative. Jeffries restrains itself to £5.90 expecting “good results” based on a repairing balance sheet and reports of new business. Consensus somewhere between the two and a 20p+ final dividend will do me.

Hydrogen_Economy 25 Aug 2018

PFC sells Greater Stella Area stake Sale of GSA stake makes sense, not PFC’s core business competence and releases capital. Time will tell whether timing is good or not, a $46m loss booked in the deal which says more about the timing and wisdom of the original deal. POO may well rise if Trump keeps poking Iran, but the bird in the hand seems the sensible decision. Market seemed to anticipate the news with a good rise on 23rd ahead of the RNS, I’ll be generous and put that down to TA, anyway the authorities are far too busy chasing Unaoil shenanigans and the misbehaviour of members of the SFO team to look into such matters. Interims out on 29th, what to do? H2 RNS Number : 7939Y Petrofac Limited 24 August 2018 Press Release 24 August 2018 PETROFAC AGREES TO SELL INTEREST IN GREATER STELLA AREA DEVELOPMENT Petrofac Limited (“Petrofac” or “the Company”) announces that it has today signed an agreement to sell Petrofac GSA Holdings Limited(1) to Ithaca Energy (UK) Limited (“Ithaca”) for a total consideration of up to US$292 million. Petrofac GSA Holdings Limited owns Petrofac’s 20% interest in the Greater Stella Area development and its 24.8% interest in the FPF1 floating production facility(2). Petrofac GSA Holdings Limited also owns Petrofac’s long-term receivable from the GSA joint operation partners(3). Under the terms of the agreement, Ithaca will pay approximately US$145 million by or on completion and a further US$120 million of non-contingent deferred consideration in the period 2020-2023. A further US$28 million of contingent consideration is payable depending on field performance. The transaction is expected to complete in Q1 2019 and is subject to several conditions precedent, including completion of Ithaca’s acquisition of Dyas UK Limited’s 25% interest in the Greater Stella Area development and its shares in the FPF1 Company in accordance with the agreement executed by Ithaca and Dyas today. Petrofac estimates that the transaction will result in a post-tax impairment charge of approximately US$55 million(4). Proceeds from the sale will be used to reduce gross debt. Petrofac will continue to provide Duty Holder services to the FPF1 floating production facility on a life of field contract. Petrofac’s Group Chief Executive, Ayman Asfari said: “This disposal marks a further milestone in our journey back to a capital-light business and, along with recently-agreed transactions in Mexico and Tunisia, marks the significant progress we are making on our stated strategy.” NOTES The gross assets being disposed of had a carrying amount of US$341 million at 31 December 2017. The net assets being disposed of had a carrying amount of US$249 million at 31 December 2017. Petrofac GSA Holdings Limited group made a business performance net profit of US$15 million for the year ended 31 December 2017 and approximately US$18 million in the six-month period ended 30 June 2018. The Company owning the FPF1 floating production facility (“FPF1 Company”) currently has an option to require Petrofac to acquire the FPF1 floating production facility on cessation of production from the development. The price for the first five years is US$127 million, declining in value thereafter. The option will be extinguished on completion of the transaction. The receivable balance of US$124 million at 31 December 2017 is included in the gross assets and net assets carrying amounts in note 1 above. This is subject to change and the actual charge will take into account, inter alia, the net assets at the date of completion. ENDS