Petrofac Share Discussion Threads

[jaknife] 17/4/2024 10:42

tahmina,

"Jaknife , problem is everything you say is backwards looking."

I'm pretty sure that pointing out that analyst forecasts for 2024 are for continued losses is forward looking. The point in highlighting both the historic and future numbers can be paraphrased as:

"Petrofac has been an awful company for the last nine years and look (!) analysts are forecasting that they're going to make that a round decade of awfulness!"


"Looking forwards, even if share price is diluted, if the company starts making good profits on the huge contracts they have those shares will rise in value, over time."

That's perfectly possible. But given that I'm forecasting a debt for equity swap/fund raise at 4p a share then it clearly makes more sense to wait for that capital restructuring before making a buy decision.

JakNife

[tahmina1] 17/4/2024 10:13

Jaknife , problem is everything you say is backwards looking. Looking forwards, even if share price is diluted, if the company starts making good profits on the huge contracts they have those shares will rise in value, over time.

[jaknife] 17/4/2024 10:01

dealy,

It's likely that there will be a debt for equity swap. Because the company has told us that that's what they're working on.

In addition to that they're likely to raise fresh equity as well as make some small disposals. Because the company has told us that that's what they're working on.

In that respect it is helpful to remember a key adage:

New investors dictate the terms to old investors.

JakNife

[geckotheglorious] 17/4/2024 10:00

Dealy
"Even if this involves substantial dilution"

Precisely!

The only question is how dilutive this D4E will be.

You got there at the end...

And I've never said it's a slam dunk to 5p either.

Fact is the company doesnt make enough money to cover its debts as they will be coming due.

So a restructuring(at what cost?) is required.

It will be highly dilutive, obviously. Only question is what percentage Equity holders are left with.

[dealy] 17/4/2024 09:56

There will likely be a deal that frees up some liquidity for Petrofac to go about its business that will also provide more certainty of servicing the debt and repaying it in the mid term. Even if this involves substantial dilution it will also put the company in a better position with improved earnings.Shorters thinking this is a slam dunk to 5p will be disappointed imo.

[jaknife] 17/4/2024 09:55

dealy,

"That is the past. This is the present and future. There has been no profit warning within the current trading period"

That's hardly saying anything is it? Given that the last profit warning was 4 Dec last year, we're only 3.5 months into the "current trading period" and the normal April trading update hasn't happened yet.

What we do know though is that analysts are forecasting that Petrofac will make a loss in 2024.

JakNife

[jaknife] 17/4/2024 09:52

Fiscal Cliff,

"Yes, we all saw that yesterday."

No you didn't.

Yesterday Fitch downgraded Petrofac to CC. Today's news is that S&P agree and have downgraded Petrofac to CCC-. Both mean the same, "Default imminent with little prospect for recovery" (from: ).

JakNife

[dealy] 17/4/2024 09:50

That is the past. This is the present and future. There has been no profit warning within the current trading period

[fiscal cliff] 17/4/2024 09:47

Yes, we all saw that yesterday.
How does anyone on here know the terms (profit margins) on the newly negotiated contracts. All negotiated at cost, or loss making were they?

[jaknife] 17/4/2024 09:38

Petrofac Downgraded to CCC- by S&P, Outlook Negative
By Chakradhar Adusumilli and Bloomberg Automation
(Bloomberg) -- Petrofac's long-term rating was downgraded by S&P to CCC- from B-.
Outlook to negative from watch developing

[dealy] 17/4/2024 09:36

Debt repayments can be negotiated and rescheduled. This happens regularly, if business is fundamentally sound

[geckotheglorious] 17/4/2024 09:31

It isnt conjecture at all.

Look at the margins on these deals.

Look at the Debt schedule.

They simply arent making enough to pay the debts as they come due UNLESS these deals suddenly become massively profitable or they get a cash infusion of some sort(and at what cost will that be!)


"The company has not issued a profits warning"

Never said they did.

You can make a small profit(be profitable) and yet not be likely to cover your debts as they fall due.

[dealy] 17/4/2024 09:11

That is conjecture. The company has not issued a profits warning

[geckotheglorious] 17/4/2024 09:04

Dealy
"So how come now everything is a disaster? It doesn't make sense"

Because they dont make much profit on the massive deals they get and thus they wont be able to pay the debts they owe as they come due.

[dealy] 17/4/2024 09:02

2.5 years ago, the market seemed happy to take up the 600m bond offering. 1 year ago, the banking facilities were renewed..Since then, events have been broadly neutral (positives being large orders, negatives been delayed cash inflows)..So how come now everything is a disaster? It doesn't make sense. I believe the company is trying to improve the balance sheet so that it can win even more business. This does not look like an emergency, even though an emergency has been priced in.

[armbar] 17/4/2024 08:36

Today price action was so obvious Hence why i said it yesterday and first thing , all in the data. Anyway good luck to all whatever you view or opinion is , you make your decisions and push the buttons no one else , whether we win or we learn as the saying goes GL

[noramping] 17/4/2024 08:24

Armbar turning from where to where, honestly you a flogging a dead horse, I admire your faith, but there is no god.

[armbar] 17/4/2024 08:11

:) did say Back to 26-28 by Friday Imo

[lodgeview] 17/4/2024 08:02

It's OVER for PFC

[armbar] 17/4/2024 07:56

Actually first time I have said it Reason Experience and data GL

[armbar] 17/4/2024 07:47

Turning like I said Last day ladies and gents Imo GL

[bc4] 17/4/2024 07:46

Take a look at Superdry! it is not that easy to raise money in this market

[topazfrenzy] 17/4/2024 07:31

Lemmings will keep buying all the way down to 5p

lol