Petrofac said today that these actions include reducing overhead and project support costs by at least $100 million in 2020 and by up to $200 million in 2021. The company’s actions also include conserving cash and liquidity by reducing capex by 40% and suspending the 2019 final dividend.
Ayman Asfari, Petrofac’s CEO, commented: “We have a resilient business model, strong competitive position and a differentiated in-country value proposition that is highly valued by our clients. Nevertheless, we are taking swift, decisive action in response to the coronavirus pandemic and lower oil prices to reduce costs, retain our competitiveness and preserve the strength of our balance sheet.”
Petrofac said that stringent health protocols are in place across all its operations and the company has transitioned to remote working to minimize business disruption.
Engineering and construction activity continues at most of its Engineering & Construction project sites and offices, although progress is being impacted by supply chain disruptions, travel restrictions and the government enforced lockdowns in India and Iraq.
Operations and maintenance activity in Engineering & Production Services business continues in all regions, albeit travel and social distancing restrictions are having a modest impact on activity levels.
As at April 2, 2020, the group had liquidity of $1.1 billion, following the planned repayment of a $75 million facility in February 2020. A 2-year extension of a $150 million term loan in March 2020 has reduced debt maturities in the next 12 months to $275 million. S&P has recently affirmed the group’s investment grade credit rating.
