A better-than-expected net debt position and record order book see shares in oil services firm Petrofac (PFC) leap 7.2% to 795.5p.
At a headline level 2015 results are pretty ugly with net profit of just $9 million against $581 million in 2014.
Much of the blame for this weak performance can be attributed to the troubled Laggan-Tomore gas plant project in Shetland.
If you strip out the costs associated with delays and operational issues on this contract net profit would have come in at $441 million.
On a more positive note, the order book is among the strongest in the sector at $20.7 billion and if it can execute on this contracted work then 2016 and 2017 profit forecasts are more or less covered.
The dividend is maintained at 65.8 cents and cost savings of $90 million are targeted by the end of the year.
Robust cash collection sees net debt come in $300 million lower than Canaccord Genuity’s forecast at $686 million.
Canaccord has a 'hold' recommendation on the stock and a 775p price target. Analyst Alex Brooks comments: ‘The issues we wrote about earlier this month remain: earnings beyond next year are heavily dependent on continued investment from Middle Eastern customers, it is almost solely dependent for its cash flow on upstream oil & gas, and its reinvestment track record is mixed at best. We see little in the short term that management can do to address these.’
