Petrofac Share Discussion Threads

[deanowls] 24/11/2014 14:48

With a 21b order book and still profitable they have decent room to manoeuvre, hopefully some lessons learnt on over promising, hopefully as a lam holder they don't go after Mr Moffat!

[leedskier] 24/11/2014 14:14

I have never been invested here, but I spent some time reading about it this morning.


Costs overrun, especially offshore, seem to be a problem.


The BP. disaster must have increased costs enormously. No wonder they say any further N.S. contracts will be costs plus. The problem is those offering contracts, like XEL, want profit sharing contracts, not costs plus, and they are getting them too.


These businesses become too stretched globally and lose focus.


As commented above, it is a management issue.

[hatter2] 24/11/2014 13:57

Sold my holding, the last lot back in May this year although I still retain them on my watch list but heavens knows why. My original sales were based upon an ever increasing loss of confidence in the management of the business. I agree resource based stocks can be cyclical but once I have lost faith in management then I am off.

I have to admit that I never managed to make any money from my PFC in’s and out’s over the last couple of years.

I hope it works ok for current holders; all the best.

[ards] 24/11/2014 13:10

sorry to say but good short on dead cat bounce

[ohisay] 24/11/2014 13:09

Cannacord comment

Of the c.$200m downgrade of net profit compared to consensus, c.$25m relates to
the PetroFirst transaction, $45m oil price, $30m Mexican PECs and Ticleni, $40m to Stella, $40m to Laggan-Tormore, and the remainder is analyst error and financials.
Some of this is arguably ‘one-off,̵7; and much is lessons learned. On today’s call the CEO Ayman Asfari stated that Petrofac will always in future bid on Shetland work (eg. Laggan-Tormore) on a cost-plus, not a fixed price, basis.
What is striking about Petrofac’s litany of woe is that none of it stems from the core Sharjah-based operations: although some of Petrofac’s international projects are successful, the hit rate is strikingly low, and no better than peers’. The major problems are two offshore North Sea projects, in one case centring on poor yard productivity as well as customer change orders, in the other challenges with weather and labour relations. Most of this is effectively ‘new’ to Petrofac, in the sense that its traditional focus (on onshore, and sour gas processing in particular) has been elsewhere, and the capability has been added in recent years.
In this context, it is little wonder that the market is so sceptical on Petrofac’s further investment projects, notably the subsea development unit the JSD6000. We are more positive, not least because plenty of companies (eg. Saipem) have run a successful offshore strategy using just one vessel. However, it is clear that Petrofac needs to do much more to deliver. We now expect 84% of 15E net profit to come from the core MENA business run from Sharjah, and 65% in 16E.
We are cutting EPS 8%/27%/23% for 14/15/16E (but just 12% thereafter) and cut our target 18% to 1150p from 1400p. We remain cautious BUYers, as we believe we are close to the trough in terms of free cash generation, that backlog for 15E is very strong, that Petrofac remains generously funded with net debt / EBITDA peaking at just over 1.1x, and that despite its woes the stock will trade at 12/11x 15/16E P/E.

[ards] 24/11/2014 13:07

live and learn. sold out when hit 1200 resistance then bought back in when it broke. just goes to show believe nothing a management tells you, only the market. also keep positions smallish and expect the unpredictable.

[togglebrush] 24/11/2014 13:04

Daily Trading passed the 'One in a hundred day' level within first 30 minutes this morning
'
Using ADVFN data for 2014 stats are
'
Max is _____________6,321,363 on 9th May following an IMS. share price intra day -15%
One in a hundred is 3,281,301
Quartile 3 is ______1,511,701
Median for 2014_____1,115,989 middle of a sorted sample

[deanroberthunt] 24/11/2014 13:01

ready for the Santa Rally boyz ?

[leedskier] 24/11/2014 12:57

David Buik was making the point pre market on twitter that the Russian Stock Market was up 2% year to date whereas the FTSE100 was only up 0.2%.

[leedskier] 24/11/2014 12:54

I think that comment was made when another bluechip was being topsliced.

[bulltradept] 24/11/2014 12:45

Someone commented on the RBS BB a few weeks ago that the FTSE100 is as volatile as Aim.

25% off a FTSE100 company?

This market is not safe.
_________________________
Company specific though surely?

[bench2] 24/11/2014 12:35

There now has to be uncertainty about whether they can manage a 21bn order book , do they have the management in depth ? Is this the Balfour Beatty of the oil service sector ?

[leedskier] 24/11/2014 12:35

Someone commented on the RBS BB a few weeks ago that the FTSE100 is as volatile as Aim.

25% off a FTSE100 company?

This market is not safe.

[henley2] 24/11/2014 12:27

P/E of 9x for 2015 implies a price of 830p. Might be tempted at that level.

[ccr1958] 24/11/2014 12:19

slightly overdone on the drop imo..under 900p is a screaming buy ... ccr.

[lex artis] 24/11/2014 12:14

No dead cat bounce, should have been the clue

[lex artis] 24/11/2014 12:13

Lucy escape

[bulltradept] 24/11/2014 11:58

£8.50 ish might be the next decent level of support.

[lex artis] 24/11/2014 11:57

good luck chaps.

Not looking good, could see 850p end of the day

[fangorn2] 24/11/2014 11:53

Outlook pretty dire as well..

Outlook for 2015 being $500m, off the $580m for this year.
That's a 14% odd fall right there before you consider that this year will be at the lower ends of expectations(which are down from the $650m in 2013.)

Definitely some froth in the O&G Services sector post Kenz takeover. PFc, Wood, Amec.All having issues. empting to buy dips and tuck away some of these as "Oil" and its use in the global economy is not yet in terminal decline.

[salpara111] 24/11/2014 11:50

Just be careful, there has been no dead kitty bounce.
The order book is not the issue, it is their inability to manage projects that has resulted in the market running out of patience. I do feel that the CEO is now under threat.

[mallorca 9] 24/11/2014 11:33

I dont think that there was anything in the RNS that warranted a 23% drop.
I've bought in with a view to a reasonably early rise back over £10.

[lex artis] 24/11/2014 11:29

tight stp here boys. no dcd

[muffster] 24/11/2014 11:00

Good call I think, puts it on a 7 to 8 PE

[hillbrown] 24/11/2014 10:55

drop is well overdone. I bought at 905.